For over a century 'imperialism 1 has been a key concept in Left theory and politics, connoting both the aggressiveness and the characteristics of ii»:'i^imfiTiTifniHiyiirt^:wffli i a theoretical concept. Since a variety of different definitions are assigned to the notion of imperialism, it is necessary to put to the test the rigour of these definitions. The authors of this volume provide a comprehensive evaluation, focussing specifically on the tension between Marx's theoretical system of the Critique of Political Economy and the theories of capitalist expansion and book is indispensable reading for post-graduates studying Political Economy and for all those seeking to understand the workings of capitalism. John Milios is Professor of Political Economy and the History of Economic Thought at the National Technical University of Athens, Greece. He has published more than 200 papers in refereed journals (in Greek, English, German, French, Spanish, Italian and Turkish) and 11 books. His research interests include Theories of Value, Money and Finance, the International- ization of Capital and Theories of Imperialism. He is the Editor of the quarterly journal of economic and political theory Thesseh (published since 1982 in Greek). Dimitris P. Sotiropoulos is Visiting Lecturer of Political Economy at the Department of Sociology, University of the Aegean, Greece. He has published papers in refereed journals {in Greek. English and German). His research interests include: theories of Political Economy, History of Economic Thought, Theory of Value and Money. He is also a member of the Editorial Board of the quarterly journal of economic and political theory Thesseis (published since 1982 in Greek). Imperialism A Study of Capitalist Rule John Milios and Dimitris P. Sotiropoulos ISBN 978-0-Z30-221O0-O 9 780230 221000 9 0101 Also I)y John Milios arid Dhnitris P. Sotiropoutos Kapitalistische Entwicklung, Nationalstaat und lm peri a I ism us. Der Fall Grieclu>nland KARL MARX AND THE CLASSICS John Milios, Dimitri Dimoulis, and George Econoniakis RETHINKING DEMOCRACY AND THE WELFARE STATE J. Milios, L Katseli, and Th. Pelagidis (nfr) WELFARE STATE AND DEMOCRACY IN CRISIS. REFORMING THE EUROPEAN MODEL Th. Pelagidis, L. Katseli, and J. Milios (eds) Rethinking Imperialism A Study of Capitalist Rule John Milios id Mmitris P. Sotiropoulos elgrave lacmillan nV 5 © John Mill os and Dimitris P. Sotiropoulos 2009 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1986, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6-10 Kirby Street, London EC IN 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2009 by PALCRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered In England, company number 78 5998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin's Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. 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A catalog record for this book is available from the Library of Congress 10 9876543 21 18 17 16 15 14 13 12 11 10 09 Printed and bound in Great Britain by CPI Antony Rowe, Chippenham and Eastbourne Contents list of Tables vtt Acknowledgements viil Introduction 1 Part I Theories of Imperialism as a Periodization and Interpretation of Capitalism: Some Open Theoretical Questions 7 1 Classical Theories of Imperialism: A New Interpretation of Capitalist Rule, Expansionism, Capital Export, the Periodization and the 'Decline' of Capitalism 9 2 Post- World War II 'Metropolis- Periphery' Theories of Imperialism 33 3 Theories of Imperialism as Alternatives to Classical and Cent re- Periphery Approaches 54 Part II Theories of Imperialism vis-a-vis Marx's Critique of Political Economy 89 4 The State as a Vehicle of both Capitalist Expansionism and Decolonization: Historical Evidence and Theoretical Questions 91 5 Capitalist Mode of Production and Social Formation: Conclusions Concerning the Organization of Capitalist Power 103 6 Capitalist Mode of Production and Monopolies 112 7 Is Imperialism the Latest Stage of Capitalism? Reflections on the Question of Periodization of Capitalism and Stages of Capitalist Development 121 Part III National Territory and International Space: Internationalization of Capital, Financialization and Imperialist Chain 145 8 Internationalization of Capital 147 9 Financialization: Market Discipline or Capital Discipline? 1 67 10 The 'Global' Level and the Concept of Imperialist Chain 184 vi Contents Epilogue: Rethinking Imperialism and Capitalist Rule Notes References Index 211 217 235 246 Tables g,l Distribution of FDI by region and selected countries 1980-2005 (per cent) 8.2 FDI inflows, by host region and major host economy, 2006-2007 (Billions of dollars) 151 152 \ii Acknowledgements Introduction This book owes debts to several people who in international meetings and conferences have discussed our theses and/or raised questions that helped the development of our arguments when the book was still in the making. Such international events were, for example, the Historical Materialism annual conferences 2006 (December 8-10), 2007 (November 9-11), 2008 (November 7-9) at SOAS, London, and the 9th Annual Conference 2007 (July 13-15) of the Association for Heterodox Economics at the University of the West of England, Bristol. The authors would like especially to thank Professor Dimitri Dimoulis (Escola de direito de Sao Paulo da Fundacao Getulio Vargas, Brazil) and Dr Spyros Lapatsioras (University of Crete) for having read and commented on the drafts of the book. A special mention is also owed to Wayne Hall for having corrected and taken care of the style of the manuscripts. For more than a century 'imperialism' has been a key concept in Left neory and politics, connoting both the aggressiveness and the overripe wacteristics of modern capitalism, or at any rate of certain capital- st fonnations. Recent debates in Political Economy have also placed lphasis on the notion of imperialism, the reason for this being that lany of Political Economy's central concerns have had to do with the egulation of the 'global' economy, capitalism's recurrent tendencies towards crisis and the centrality of the logic of capital accumulation. But the term 'imperialism' has never denoted a single theoretical approach. From the era of classical Marxist theories of imperialism (Hilferding, Luxemburg, Bukharin, Lenin ,..) to the present day, dif- ferent and often conflicting theories and political strategies have been prevalent among Left intellectuals and political organisations. A point of clarification on methodology: 'Imperialism' is one of the most widely discussed terms in Marxist theory, having entered everyday political usage and having been disseminated very widely. This accept- ance may be attributed to the political-critical use to which it was put for decades, and to a large extent still is, by Leftist organizations and in particular Communist Parties. This means that imperialism belongs to Marxism as an ideology of the masses (mass Marxism), and as a practi- cal ideology of the workers' movement (Milios 1995, Lapatsioras et al. 2008) and that to some extent it is to be included amongst common sense notions of politics and economics. The price that is paid for this is that the term becomes inexplicit, superficial and often contradictory, used mainly in denunciation of 'bad' imperialism, its 'plans' and the misery it inflicts on the world. In the present study we clearly dissociate ourselves from this usage of the term. Our aim is to present and assess imperialism as a theoretical 2 Rethinking Imperialism; A Study of Capitalist Rule Introduction 3 concept, that is to say as part of Marxist theory (theoretical Marxism). At this level, however, a variety of different analyses are advanced and different definitions assigned to the concept of imperialism in the works of different Marxists. What we are seeking to do is to put to the test the rigour of these definitions, their positive and negative elements. We want in this way to arrive at a comprehensive evaluation, from which conclusions may be drawn that can be useful in political action, also re- equipping Marxism as mass ideology with a more successful and potent concept of imperialism. Our critical evaluation of the different approaches to imperialism eschews every resort to arguments from 'authority'. No Marxist writer, however significant he/she might be from a theoretical viewpoint or on account of his/her political activity, can be regarded as being in posses- sion of all the truth in relation to imperialism (or any other concept) or at any rate enjoying any relevant advantage over other writers. We apply three basic criteria in our assessment of the various approaches. Firstly, the internal logical coherence of the arguments in each approach. Secondly, the relationship between their coherence and fundamental concepts of Marx's, and Marxist, theory. Thirdly, the poten- tial of each approach to provide an explanation of historical and contem- porary tendencies in capitalism and, conversely, refutation of theoretical predictions and evaluations of imperialism through empirical data. In Part I of the book (Theories of imperialism as a Periodization and Interpretation of Capitalism: Chapters 1-3) we propose to conduct a criti- cal review of the various major approaches to imperialism as a point of departure for the formulation of our own theoretical analysis. Chapter 1 (Classical Theories of imperialism: A New interpretation of Capitalist Rule, Expansionism, Capital Export, the Periodization and the 'Decline' of Capitalism) deals with the Marxist theories of imperial- ism, formulated in the years 1909-25, that is after the publication of J. A. Hobson's book Imperialism (1902) - above ail the approaches of Hilierding, Luxemburg, Bukharin and Lenin. We argue that the theoret- ical analyses that were put forward in this period, and the controversies over the 'latest stage' of capitalism, the 'rule of the monopolies', 'global capitalism', underconsumption and crisis, capital exports, 'stagnation and decay' of capitalism, etc. retain their relevance to this day. This is so on the one hand because they comprise to a very large extent the background to present-day discussions; on the other hand, and prima- rily, because their critical assessment can make a significant contribu- tion to the further progress of Marxist theory and the Marxist critique of contemporary capitalism. Chapter 2 (Post-World War 11 'Metropolis-Periphery' Theories of Imperialism) includes a critical presentation of the 'metropolis-periphery' $H 'centre-periphery' approaches, placing special emphasis on the notions of dependency, global capitalism, unequal exchange, develop- ment vs. underdevelopment, international division of labour, etc. on which these approaches are grounded. Following certain trends of the classical theories of imperialism, all 'metropolis-periphery' theories share the fundamental assumption that capitalism exists only as a glo- bal system, and that the locus of operations of regularities immanent in the capitalist mode of production is the international community and not the national social formation. They thus conceive the international capitalist system as a uniform global capitalist-class structure, of which national economies and national states are merely separate individual components. The theory acquires a fully elaborated expression in recent works that provide grounds for postulating a 'new international divi- sion of labour' which can help make sense of the phenomena of inter- national restructuring of production that has become observable in recent years. In our critical presentation of these theories we stress their internal contradictions and even more so their inability to arrive at a comprehensive theory of the capitalist state and political power. Chapter 3 (Theories of imperialism as Alternatives to Classical and Centre-Periphery Approaches) investigates a theoretical tradition which, following the approaches of Schumpeter and Weber, and to some extent certain analyses of Kautsky, proposes a 'political' interpretation of imperialism, giving emphasis to the policies of the state and the interests vested in them. This tradition is partly incorporated in the modern theories of 'new imperialism' and in their endeavour to dis- tance themselves from the reductionist perceptions of the classic and centre-periphery approaches, which perceive the state as a mirror of economic causality and economic processes. However, what is present here is less a critique of economism and reductionism and more the maintenance of a similar essentialist schema in accordance with which every social instance (the economy, the state, ideology) coexists with every other in the framework of a deeper unity which it can also fully express at any moment. In Part II of the book (Theories of imperialism vis-a-vis Marx's Critique of Political Economy: Chapters 4-7) we embark on a critical interroga- tion of all innovations introduced into theoretical Marxism by theo- ries of imperialism (for example those concerning the capitalist state, the stages of historical evolution of capitalism, internationalization of capital, crises, etc.) thus revising or re-interpreting the theoretical 4 Rethinking Imperialism: A Study of Capitalist Huk system formulated by Marx, especially in Capital and his other mature economic writings. Chapter 4 deals with The State as a Vehicle of both Capitalist Expansionism and Decolonization, touching upon both historical evi- dence and questions of theory. The chapter provides some preliminary illustrations of the crucial role of the state in consolidating capitalism, and in both the colonization of external territories and the decoloniza- tion of these territories through the creation of new nation-states. The analysis is further developed In Chapter 5 (Capitalist Mode of Production and Social Formation), Some conclusions are drawn con- cerning the organization of capitalist power. The notions of capitalist mode of production, capitalist social formation, and capitalist state as nation-state, are all explored. Chapter 6 {Capitalist Mode of Production and Monopolies) challenges a key thesis of nearly all the theories under investigation, namely that imperialism is linked to monopoly capitalism as a new stage hi economic and social development. It is argued that the theory of 'monopoly capitalism' constitutes more a revision of Marx's theory of capitalism than a further development or actualization of his theoretical analysis. Chapter 7 (is Imperialism the Latest Stage of Capitalism? Reflections on the Question of Periodization of Capitalism and Stages of Capitalist Development) provides an alternative approach to the problem of perio- dization of capitalist social formations, of the historical forms of the capitalist state and the issue of capitalist development, also focussing on a critique of the historicist problematic. Summarizing Part [I of the book, the following conclusion might be put forward: The nation-state's condensation of class struggle and class domination results in an internationally fragmented capitalist world. As the setting for social relations, the territory of the state is unequivocally stamped by its national dimension, within the boundaries of each nation-state's territory. Within the framework of the social formation, it bears the mark of accumulated political power of class domination in every detail of state operations, which are the decisive factor in gener- ating the overall conditions that are a prerequisite tor reproduction of the capital relation. It is conditioned (i) by the trend towards political, administrative, judicial, institutional and cultural homogenization that is inextricably interwoven with state power and its boundaries; (ii) by the specific (national) policies for management of the workforce, incen- tives policies and every kind of intervention for enhancing the profit- ability of the (national) social capital and its expansion internationally, _* *h Introduction 5 a t the expense of other national social capitals and (iii) by the single currency and the specific institutional and legislative framework that ensures the unity and freedom of the national market and direct com- petition between the different capitals operating within the borders. Under these 'national' conditions there is reproduction, in forms adequate to them, of the capitalist mode of production (CMP) and the capitalist division of labour, with transformation of individual capitals into social capital. Global space is divided into separate (national) spaces of class domination, separate regions of expanded reproduction of the various (national) social capitals. Part III of the book (National Territory and International Space: Internationalization of Capital, Financial! zation and Imperialist Chain: Chapters 8-10) deals with the interaction between the historically formed multiplicity of social capitals and capitalist states at the global level, resulting in formation of an international economic and political space (ttie imperialist chain) linking together the different social capitals and capitalist social formations. But these international integrative processes cannot go beyond certain limits. For as long as they are con- fronted on the global market by national capitals at unequal levels of development, the less developed nations will yield to the protectionist and equalizing reflex whose roots are in the nation-state-based structur- ing of every social capital. Chapter 8 (Internationalization of Capital) commences with a critique of the notion of dependence as the point of departure for a theory of modification of competition on the world market, with currency parities transforming relative cost differences between competing enter- prises from different countries into absolute differences in costs. On this theoretical basis an interpretation of capital internationalization and capital exports is put forward, with a corresponding refutation of the theory of unequal exchange. Chapter 9 (Financialization: Market Discipline or Capital Discipline?) shows that neoliberalisrn (the contemporary mode of operation of mar- kets and the economic, political and military policies of the state) nei- ther can be interpreted as the by-product of domination by the financial sector over 'productive enterprise' (managers and workers) nor can it be seen as a symptom of the rule of the 'rentier class' over the rest of society. Neoliberalisrn is the strategy of the capitalist class as a whole. Its predom- inance is the by-product of a shift in the class relation of forces following the economic crisis of the early seventies. The present economic crisis is systemic, in the sense that it has been brought about by the elements and the relations that are at the core of the neoliberal model. 6 Rethinking Imperialism: A Study of Capitalist Bute Chapter 10 (The 'Global' Level and the Concept of Imperialist Chain) approaches today's imperialist order through the notion of imperialist chain, which is formulated in accordance with Marx's concept of social capital and his theory of the capitalist mode of production. Most theo- ries of imperialism, including historicist approaches and doctrines of 'empire', distance themselves from the Marxian problematic of social capital (defined as the expression of the causal order of capitalist rule at every level of society). The analysis in Part HI of the book defends the thesis that internal- national relationships and processes always have priority over interna- tional relations. It is precisely the fundamental discovery of Marxism that the class struggle (which is at the same time economic, political and ideological and is thus consummated within each national- state entity) is the driving force of history. The class struggle, that is to say in the final analysis the class correlation of forces within each social formation (or, otherwise expressed, the correlations inside a system of class domination), is/are the prime determinant of the developmental tendencies of the specific social formation. It is through these class correlations and relations of domination that international relations, with all the concomitant interdependence on other social formations, take effect. International relations are merely a complex of more or less significant historical determinations that act upon class correlations via the 'laws of motion' of the economy and society. In other words national processes determine the way in which the national is inte- grated with the international. Finally, the Epilogue: Rethinking Imperialism and Capitalist Rule con- cludes the analysis, focussing especially on the tension between Marx's theoretical system of the Critique of Political Economy and the theory (or rather theories) of capitalist expansion and domination that emerge out of the various discourses on imperialism. part I Theories of Imperialism as a Periodization and Interpretation of Capitalism: Some Open Theoretical Questions Classical Theories of Imperialism: A New Interpretation of Capitalist Rule, Expansionism, Capital Export, the Periodization and the 'Decline' of Capitalism It has already been hinted in the Introduction that the questions posed by present-day analyses of imperialism and the national state, and indeed the corresponding conceptions of 'globalization', are not being raised today for the first time. They had already been intro- duced, in similar terms despite the different historical circumstances, in the 'classical' theories of imperialism (as they are customarily called in the relevant literature), most of which, as is well known, were formulated in the second decade of the twentieth century (in chrono- logical order of their composition: Hilferding (1981) first published in 1909, Luxemburg (1971) in 1912, Bukharin (1972a) in 1915, Lenin in 1916). Our view is that the theoretical analyses that were advanced and the controversies over 'global capitalism' (and indeed over the 'rule of the monopolies') that took place in the IS years between 1910 and 1925 retain their relevance to this day. This is so not only because they com- prise to a very large extent the background to present-day discussions. It is also, and primarily, because their study can make a significant contribution to the further progress of Marxist theory and the Marxist critique of contemporary capitalism. Before proceeding with a brief and general presentation of the classic Marxist theories of imperialism, we shall make a passing mention to a writer whose intervention played an arguably significant role in the shaping of the relevant Marxist debate. This is J. A. Hobson, who was in no way a follower of Marx, but who did admire Thorstein Veblen (Hobson 1937) and won recognition (justly, as an authentic undercon- Sumptionist) from Keynes.' 10 Rethinking imperialism: A Study of Capitalist Rule 1.1 Imperialism is a symptom of the capitalist crisis in Hobson's argument In a conjuncture of sharpening antagonism between the major capi- talist powers over the colonies, the journalist and writer J. A. Hobson in 1902 coined a new popular term to describe the phenomena of his age: imperialism. Many of Hobson's ideas influenced the Marxist theories of imperialism that were to be formulated a few years later. In what follows we shall attempt to summarize the writer's basic theses. (a) Monopoly capitalism. According to Hobson capitalism appears to have moved beyond its 'competitive' stage and entered a new phase characterized by high levels of concentration of capital in 'trusts' and 'combines' (Hobson 1938: 75-6). (b) Underconsumption. Given that Keynes was most probably unfa- miliar with Marxist theoretical controversies and especially the writ- ings of the Russian Narodniks, he was right in postulating that the underconsumptionist theories of Malthus and Sismondi had been forgotten by the end of the nineteenth century, that is to say the date of appearance of the interventions by Hobson and Mummery (see Keynes 1973: 364). 2 What was revived with Hobson was primarily the Sismondi variant. Bear in mind that according to the latter, capitalism is characterized by an inherent contradiction between capitalist produc- tion and the consequent distribution of income. The growth of pro- duction is accompanied by reduction in the income of the labouring masses, in turn triggering a fall in consumption and leading to recur- rent capitalist crises (Hobson 1938: 83). (c) Export of capital as an answer to the problem of the crisis. Given capitalism's chronic tendency towards underconsumption, there is a permanent shortage of opportunities (investment spheres) for pro- ductive utilization of capitalist profits. The low income level of work- ers ultimately precludes savings from being converted into productive investments, with the result that there is a chronic savings surplus or surplus of capital. The new monopolized structure of advanced capital- ism further exacerbates the problem rather than solving it. The reason for this is that the 'concentration of industry in "trusts", "combines", etc., at once limits the quantity of capital which can be effectively employed and increases the share of profits out of which fresh savings and fresh capital will spring' (ibid.: 76). (d) Imperialism is a symptom of the capitalist crisis (of underconsump- tion). Imperialist policy is seen by the developed states as an answer to Classical Theories of Imperialism 1 1 the problem of unutilized surplus capital: The over-saving which is the economic root of imperialism is found by analysis to consist of rents, monopoly profits, and other unearned or excessive elements of income [...] Thus we reach the conclusion that Imperialism is the endeavour of the great controllers of industry to broaden their channel for the flow of their surplus wealth by seek- ing foreign markets and foreign investments to take off the goods and capital they cannot sell or use at home. (ibid.: 85) (e) The emergence of the parasitical rentier as a consequence of the crisis. Hobson's analysis represents a breach with Say's Law and creates the preconditions for the emergence of the rentier, that is to say the person who converts his savings into financial assets. The latter are loans that can be channelled either towards the domestic money market where they 'stagnate', generating financial instability, or towards the 'interna- tional' money markets of the less developed countries (usually in the guise of state loans). This is the origin of the idea we encounter in the later works of Bukhariri and Lenin whereby the developed states are transformed into rentier-states, that is to say states that are enriched by the debt of the underdeveloped countries (ibid.: 364-6). We shall conclude this commentary on Hobson's intervention with three observations. Firstly, through his argumentation Hobson carries out a twofold reduc- tion. On the one hand he reduces the phenomenon of imperialism to capitalist crises. In exactly the same way as we see in later Marxist analyses, the discussion on imperialism is essentially nothing more than a sub-instance of the discussions on capitalist crises. We should therefore not regard as exaggeration the following remark of Fieldhouse (1961: 188-9) when he said that Hobson's conception of imperialism 'was primarily a vehicle for publicizing the theory of underconsump- tion*. Imperialism is defined as a symptom of the gradual trend towards collapse that is inherent in capitalism: 'Imperialism is thus seen to be, not a choice, but a necessity' (Hobson 1938: 73). On the other hand, Hobson simultaneously reduces the political element (the state) of a social totality to its economic element (the process of capital accu- mulation): the political behaviour of a state is completely dependent on - reflects - the contradictions that permeate the economy. If the survival of the advanced capitalist countries depends on the export of capital, then, according to Hobson's argument, the state will support 12 Rethinking Imperialism: A Study of Capitalist Rule this extension through imperialist policies which at their extreme can take the form of war. This is the origin of the basic idea in later Marxist theory that competition between advanced capitals is interwoven with, and determines, geopolitical competition between states. Secondly, Hobson distinguished between (early) colonialism and 'imperialism' on the basis of an argument purely apologetic of colonial expansion. He claimed that pre-imperialist colonialism aimed at pro- moting civilisation and industry in the 'temperate zones': Thus this recent imperial expansion stands entirety distinct from the colonization of sparsely peopled lands in temperate zones, where white colonists carry with them the modes of government, the industrial and other arts of the civilisation of the mother country. (ibid.: 27) Finally, one implicit precondition for Hobson's argument is not just that politics (the state) is subordinated to the economy, but also that imperialism is a global structure, a binding system that dictates the political and economic behaviour of individual states. Imperialism, in the form of political support for the export of surplus capital, is a global contest for hegemony presupposing one group of developed and another group of undeveloped-dependent states, common factors in an uninterrupted global continuum (core-periphery structure, the logic of dependency). 1.2 A general overview of classical Marxist approaches to imperialism: Elaboration of Hobson's thesis Following Hobson, the Marxist theories of imperialism explicitly distin- guished between early colonialism and the corresponding phenomena of the 'latest' phase of capitalism to which, exclusively, they gave the name of 'imperialism'. In doing so they did not however follow Hobson's apologetic argument concerning the 'civilising effect' of early colonial- ism. Marxist writers claimed that the 'latest phase' of capitalism was the outcome of the 'domination of monopolies'. Rudolf Hilferding (1877-1941), in his Finance Capital, was the writer who introduced into Marxist theory this idea of a 'latest phase' of capitalism, characterised by the following features (Milios 1999a, 2001): formation of monopolistic enterprises (which abolish capitalist com- petition), fusion of bank and industrial capital (leading to the forma- tion of finance capital, which is seen as the ultimate form of capital), Classical Theories of Imperialism 13 subordination of the state to monopolies and finance capital, and finally- emergence of an expansionist policy of colonial annexations an d war (Hilferding 1981: 326). The idea of a 'latest', monopolistic-imperialist stage of capitalism pos- sessing the abovementioned features was adopted by Bukharin, Lenin, Kautsky and others (notwithstanding the disputes among them in rela- tion to specific features of this approach or its political consequences), thus shaping what are called the Marxist theories of monopoly capital- ism, which until recently dominated most Marxist streams of thought, and especially Soviet Marxism {see Abalkin et al. 1983, Brewer 1980, Milios 1988). In her Accumulation of Capital (1913) Rosa Luxemburg conceived of imperialism primarily as a struggle among developed capitalist coun- tries for the domination over still-unoccupied non-capitalist territories: 'Imperialism is the political expression of the accumulation of capital in Its competitive struggle for what remains still open of the non-capitalist environment' {Luxemburg 1971: 446). On the basis of her underconsumptionist approach, Luxemburg thought of non-capitalist territories as the major reservoir of 'third-party consumers', who alone could absorb that portion of surplus value that neither capitalists nor workers could (supposedly) realize (Milios 1994): 'realisation of surplus value requires "third persons", that is to say consumers other than the immediate agents of capitalist produc- tion!...] there should be strata of buyers outside capitalist society [...] social organisations or strata whose own mode of production is not capitalistic' (Luxemburg 1971: 350-2). In short, 'that part of the surplus value [...] which is earmarked for capitalization, must be realised else- where' (ibid.: 366). Both Luxemburg and Bukharin (in the latter's Imperialism and World Economy, 1915) conceived of capitalism as a unified world structure. In other words they claimed that in the era of imperialism, expanded reproduction of the capitalist mode of production (CMP) takes place on a world scale, not at the level of each capitalist social formation. Thus, as Bukharin put it: World economy is one of the species of social economy in gen- eral. [...] The whole process of world economic life [...] reduces itself to [,,,] an ever widening reproduction of the relations between two classes - the class of the world proletariat on the one hand and the world bourgeoisie on the other. (Bukharin 1972a: 27) 14 Rethinking Imperialism: A Study of Capitalist Rule Bukliarin also defined imperialism 'as a policy of finance capital', at the same time specifying that 'one may also speak of imperialism as an ideology' (ibid,: 1 10), The policy and ideology of imperialism are structural characteristics of modern capitalism: 'imperialism is not only a system most intimately connected with modern capitalism, it is also the most essential element of the latter' (ibid.: 139-40). In imperialism: The Highest Stage of Capitalism (1917) Lenin defined imperialism as: [Cjapitalism in that stage of development in which the dominance of monopolies and finance capital has established itself; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun; in which the division of all territories of the globe among the biggest capitalist powers has been completed, (CW, vol. 22) Lenin attributed the intensifying contradictions among imperialist powers to the uneven development of capitalism, which precluded the formation of a stable 'ultra-imperialist' alliance of capitalist pow- ers. This in turn was giving rise to 'alternating forms of peaceful and no n -peaceful struggle out of one and the same basis of imperialist con- nections and relations' (ibid, original emphasis). In what follows we propose to embark upon a more thorough discussion of three of the main postulates introduced by theories of imperialism into Marxist theory: (1) The thesis of the global character of capitalism, (2) the idea that capitalism has been transformed into 'monopoly capitalism' and (3) the conception of capital exports as a by-product of the lack of domestic spheres of profitable investment. 1.3 Main arguments and controversies in classical Marxist theories of imperialism 1.3.1 Capitalism as a global structure A. Luxemburg and Bukharin As already argued, Luxemburg's and Bukharin's approach to the question of imperialism were upheld by, and introduced, a specific viewpoint on the global character of the capitalist mode of production. This viewpoint is precisely that the capitalist mode of production, and the fundamental Classical Theories of Imperialism 15 strucl ural relationships and class relations that characterize the capitalist system are reproduced in their most fully developed form only at the level of the global economy; that, accordingly, the laws and the causal relationship 5 discovered and analysed by Marx pertain to the global economy, which is thus shaped as a single capitalist social structure. In a manuscript published after her assassination under the title What is Economics {Einfuhrung in die Nationalokonotnie), Rosa Luxemburg puts forward the view that the national economy cannot be comprehended as a specific socio-economic structure but is simply a section of the single global economy: In the century and a half since the modem economy first made its appearance in England, the global economy has gone from strength to strength on the basis of the misery and ruin of the human race [...J. Nothing today plays a more important role in political and social life than the contradiction between the economic phenomena, which every day unite all the peoples into a great whole, and the structure of the states, which strive to introduce artificial divisions between people, marking out borders with posts, erecting customs barriers, inciting militarism. (Luxemburg 1925: 42-3, our translation) This idea of the globally united capitalist structure was to be developed even further by Luxemburg in her Accumulation of Capital, There she was to attempt a thoroughgoing reformulation of the Marxist theory of reproduction of social capital at the global level. The extract below on the internal and external markets provides an excellent illustration of her thesis on 'global capitalism': At this point we should revise the conceptions of internal and external markets which were so important in the controversy about accumulation. (...] The internal market is the capitalist market, production itself buying its own products and supplying its own ele- ments of production. The external market is the non-capitalist social environment which absorbs the products of capitalism and supplies producer goods and labour power for capitalist production. Thus, from the point of view of economics, Germany and England traffic in commodities chiefly on an internal, capitalist market, whilst the give and take between German industry and German peasants is trans- acted on an external market as far as German capital is concerned. (Luxemburg 1971: 288) ] 6 Rethinking Imperialism: A Study of Capitalist Rule Bukharin put forward similar views a tew years later, in 1915. He sug- gested that 'we may define world economy as a system of production relations and, correspondingly, of exchange relations on a world scale. \...\ just as every individual enterprise is part of the national economy, so every one of these national economies is included in the system of world economy' (Bukharin 1972a: 27). From this point of departure Bukharin was to argue that the various national economies (which are polarized between developed industrial economies on the one hand and underdeveloped agricultural economies on the other) are subsets of the global economy, constituting a global capitalist division of labour, on the grounds of which the conflict between the global bourgeoisie and the global proletariat is played out: The cleavage between town and country, as well as the development of this cleavage, formerly confined to one country only, are now being reproduced on a tremendously enlarged basis. Viewed from this standpoint, entire countries appear today as towns, namely, the industrial countries, whereas entire agrarian territories appear to be country (ibid.: 21) National economies and national states were created, according to Bukharin, in a specific historical epoch, in which the level of capitalist development precluded the emergence of global economic structures. But the global capitalist economic structure is a phenomenon of the age of imperialism, so that there is now a capitalist mode of organiza- tion that 'tends to overstep the "national" boundaries' (ibid.: 74). It encounters significant obstacles, however. The development of capi- talism is seen as being linked to the contradiction between the global development of productive forces on the one hand and the limitations of 'national' organization of production on the other: There is here a growing discord between the basis of social economy which has become world-wide and the peculiar class structure of society, a structure where the ruling class (the bourgeoisie) itself is split into 'national' groups with contradictory economic interests, groups which, being opposed to the world proletariat, are compet- ing among themselves for the division of the surplus value created on a world scale. Production is of a social nature; [...] Acquisition, however, assumes the character of 'national' (state) acquisition [...] Under such conditions there inevitably arises a conflict, which, given Classical Tliearies of Imperialism 17 die existence of capitalism, is settled through extending the state frontiers in bloody struggles, a settlement which holds the prospect of new and more grandiose conflicts. (ibid.: 106) So as to be able to put forward an interpretation of the First World VVar, which had already broken out, 3 Bukharin evidently places greater weight than Luxemburg on the contradiction between 'global capital- ism' and the 'national appropriation' of the surplus product. B. Lenin's concept of the imperialist chain as a critique of 'global capitalism' This is the time to mention Lenin's critique of the conclusions of the theory of 'global capitalism', which is to be found in his texts on the national question and the state. The critique that Lenin attempts to mount represents a rupture within the classical discourse on imperial- ism, leading us to crucial conclusions, which we shall further evaluate in the following chapters. This view of capitalism as a unified global socio-economic structure predominates within the revolutionary Marxist current in the first half of the decade between 1910 and 1920. The view seems to have been adopted initially even by Lenin, as is clearly visible in the introduction he wrote for Bukharin's book on imperialism in December 1915 (CW, vol. 22). During the period in question world-historical changes were taking place in Europe and in Russia. The First World War had broken out, bringing catalytic social upheavals that were tending to destabilize capi- talist power in the warring countries. The popular masses were being radicalized with great dispatch: the question of social revolution was coming onto the agenda. In the revolutionary wing of the social democracy two types of ques- tions were being raised with the utmost urgency at that time. First, the question of revolutionary strategy, that is to say the question of the preconditions under which the working class might win power. Second, the question of political tactics, with the key problem here - apart from the stance on the war (which for the revolutionary current was not up 'Or discussion) - being the stance of the Left towards the movements of national self-determination that were developing in various countries. On this question the viewpoints that predominated within the revolu- tionary wing of the social democracy all disputed in one way or another the right of nations to self-determination/ 18 Rethinking Imperialism: A Study of Capitalist Rule These conceptions were a direct outcome of the theory of global capitalism and employed two types of arguments: firstly that the self-determination of nations, the creation of new nation-states, had become impossible in the age of imperialism; and secondly, that the tendency of socialist revolution is necessarily towards establishing a global, or at any rate a multinational, socialist regime, a process incompatible with the demand for national self-determination. Among the theoreticians of imperialism, Luxemburg openly opposed political support for national self-determination (see Luxemburg 1961). And Bukharin too, even after the Russian Revolution, kept his distance from the demand for national self-determination. 5 As is well known, Lenin came out against this strategy. His opposition to it led him finally to a break with the theory of 'global capitalism' and formulation of the conception of the imperialist chain, Lenin supported the demand for national self-determination, not from the viewpoint of nationalism but for exactly the opposite reasons, from the viewpoint of proletarian revolution. As early as 1915 he was formulating the theory of social revolution as an overall outcome and distillation of social antagonisms and conflicts within a social formation, arguing that the bask question of every revolution is that of state power (April 1917, vol. 24). As is well known it was fust a few months later, in August-September 1917, in State and Revolution, that he was to put forward the theory of the state as material condensation of the relationships of power and the resultant necessity for the working class to smash and destroy the bourgeois state. On the basis, then, of the Marxist conception of the bourgeois state as the specific capitalist form of political organization of power, the social content of the nation becomes perceptible. The state is a national state, the nation expresses the overall economic, social and cultural outcome of the specific (capitalist) social cohesion between the ruling and the ruled class of a social formation. The composition of the state in the ideal case proceeds in step with the formation of the nation. As the state takes the form of the nation-state, so does the nation strive towards its political integration in an independent state. The existence, through a histori- cal process, of other specific nationalities within a (multinational) state generally coincides with the presence of a dominant nationality (which will lend 'national coloration' to the specific state) and with the oppres- sion by it of the other nationalities. This means that at the same time there is a tendency among the oppressed nations towards secession and the creation of separate nation-states. Lenin's insistence on the Marxist theory of the state and of political power was to lead him to differentiate himself from the predominant Classical Theories of Imperialism 19 conception of imperialism as a uniform global socio-economic struc- ture. He accordingly went on to formulate the theory of the global imperi- alist chain. The internationalization of capitalism through foreign trade 3 nd the creation of the international market, through capital exports, the creation of international trusts, etc., binds together the different capitalist social formations, creates multiform, but also unequal, con- nections between them, and in this way shapes a single global imperial- ist chain. What this entails, however, is not a uniform global socioeconomic structure, but the meshing together at the international level of the different (nation-state) economic and social structures, each of which develops at a dif- ferent rate, largely because of the different class and political relationships of force that have crystallized within them. This thesis has twofold theoretical consequences. First, it leads to the formulation of the 'law of uneven development 1 of each national link in the imperialist chain: 'the even development of dif- ferent undertakings, trusts, branches of industry, or countries is impos- sible under capitalism' (Lenin, CW, vol. 22). On the basis of this 'law' Lenin elaborates on an entirely new problematic: to the predominant viewpoint on the global capitalist economic structure he counterposes the imperialist chain, the links of which are not national economies (Bukharin, see above) but states. Thus what counts is not simply 'eco- nomic development' but the overall (economic, political, military) power of each state that is a link in the chain. The second theoretical consequence of Lenin's thesis of the global imperialist chain involves the material (domestic and international) preconditions for proletarian revolution. This is the theory of the weak link. Effecting a breach with the 'imperialist economising that prevailed, in one way or another, within the international social democracy, Lenin maintained that the overthrow of capitalism would not emerge either out of ttie inability of the global system to reproduce itself worldwide, or out of the contradictions that are assumed to be entailed by capital- ism's excessive 'ripeness'. Socialist revolution does not take place in the most developed capitalist country but in the country that is the weak link in the imperialist chain: in the country where the domestic and international contradictions merge and are intensified to such a degree, at every level, as to make objectively unavoidable the clash between capital and labour and the revolutionary crisis. Lenin was to note in his 'Letters from Afar': That the revolution succeeded so quickly and - seemingly, at the first superficial glance - so radically, is only due to the fact that, as a result 20 Rethinking Imperialism: A Study of Capi talis t Rule Classical Theories of Imperialism 21 of an extremely unique historical situation, absolutely dissimilar currents, absolutely heterogeneous class interests, absolutely contrary political and social strivings have merged, and in a strikingly 'harmo- nious' manner. (Lenin, CW, vol. 24) Lenin's theoretical intervention on the national question and the pre- requisites for the socialist revolution illustrate the necessity of taking the state seriously. A theory of the state is indispensable not only for comprehending capitalist expansionism, imperialism and colonization, but also decolonization, through the formation of new independent capi- talist states out of multinational empires or in former colonies (see Part II). Lenin's pamphlet on imperialism alone is not an adequate basis for comprehension of the range of his analysis as regards the notion and the structural characteristics of the imperialist chain (at the time of the First World War). It did not aim so much at being a theoretical interven- tion (this is indeed implicit in its subtitle: 'a popular outline') but an intervention primarily political in its objectives. 1.3.2 Monopoly and the decay of capitalism Marxist theories of imperialism are by definition theories of rule by monopolies. This is perhaps the most significant thesis introduced into the Marxist problematic by Rudolf Hilferding through his book Finance Capital. The basic views for which Hilferding endeavoured to provide the grounding were subsequently adopted by all the classical theories of imperialism and may be summarized as follows. The predominance of monopolies not only within the bourgeois class but also over society as a whole is the specific characteristic, indeed the distinguishing feature, of contemporary capitalism. This predominance is based on the merg- ing of banking capital with industrial capital, under the direction of the former, and the formation in this way of a new dominant fraction of capital: finance capital, imperialism and colonialism thus emerge as the expression and the result of competition at the international level between the dominant monopoly groups of the different countries. According to the argumentation of Hilferding, the rule of monopolies inevitably transforms the capitalist state into a lever for the promotion of imperialist interests, the predominant interests in every developed capitalist country of the imperialist oligarchy The result is thus the strengthening of the repressive power of the bourgeois state, policies of colonialism, exploitation by the imperialist forces of the smaller nominally independent states utilizing not only every conceivable economic means (e.g. exports of capital) but also every political means, interimperialist rivalries which can lead even to war, etc. The basis of this analysis is the hypothesis that in parallel with the predominance of monopolies goes suppression of free competition, making possible the subordination of the state to the interests of the monopolistic oligarchy. And Hilferding's problematic in relation to the state is summed up as follows: Finance capital does not want freedom, but domination [...] But in order to achieve these ends, and to maintain and enhance its predom- inant position, it needs the state [.„] It needs a politically powerful state [...] which can intervene in every corner of the globe and trans- form the whole world into a sphere of investment of its own financial capital. Finally, finance capital needs a state which is strong enough to pursue expansionist policy and the annexation of new colonies. [...] Capital becomes the conqueror of the world, and with every new country that it conquers there are new frontiers to be crossed. (Hilferding 1981:334-5) These views were adopted both by Bukharin and by Lenin, in the latter case in a particularly contradictory way. Bukharin (1915) incorporated Hilferding's theses on the predominance of monopolies into his con- ceptions of the global capitalist economy and in this way arrived at the position on the merging of monopoly capital and the state. This merger, according to Bukharin, takes the form of a 'state monopoly trust': The world system of production assumes in our times the following aspect: a few consolidated, organised economic bodies ('the great civilised powers') on the one hand, and a periphery of undeveloped countries with a semi-agrarian or agrarian system on the other. [...] The economically developed states have already advanced far towards a situation where they can be looked upon as big trust-like organi- sations or, as we have termed them, state capitalist trusts. We may, therefore, speak at present about the concentration of capital in state capitalist trusts as component parts of a much larger socio-economic entity, world economy. (Bukharin 1972a: 73-4, 118) Lenin similarly reiterates Hilferding's argumentation on the abolition of free competition (e.g. in the first chapter of Imperialism). But in addition to this, influenced by Hobson, he regards Hilferding's analysis of the 22 Rethinking Imperialism: A Study of Capitalist Rule decline of capitalism in the era of imperialism as inadequate. Thus in his notes, later published in vol. 39 of his Collected Works as Notebooks on Imperialism, he admonishes Hilferding for ignoring 'such important fea- tures of imperialism as the division of the world and the struggle for its re-division, and the parasitism and decay of capitalism' (CW, vol. 39), reasserting in Imperialism that Hilferding is 'taking a step backward compared with the frankly pacifist and reformist Englishman, Hobson' {CW, vol. 22). In accordance with Hobson's argumentation, at this point embraced by Lenin also, capital exports and exploitation of the colonies lead to a slow- ing down of development of the imperialist countries. Capitalist produc- tion becomes less and less necessary for these countries, because they now feed on the exploitation of the colonies. They plunder the whole world, 'cutting coupons'. In the stage of monopoly capitalism, developed capitalism is transformed into a capitalism that is in decay. Moreover, always according to this view, the dominant classes of the imperialist countries use their colonial extra profits to buy off the upper layers of the proletariat, the workers' aristocracy. As a result, these layers become politically oriented towards opportunism, that is to say they become vehicles for a bourgeois line inside the workers' movement. Thus Hobson wrote (to quote him first and then append Lenin's detailed analysis): There is first the habit of economic parasitism, by which the rul- ing state has used its provinces, colonies, and dependencies in order to enrich its ruling class and to bribe its lower classes into acquiescence. (quotation from Hobson's book Imperialism cited by Lenin, CW, vol. 22) But the argumentation adopted by Lenin was subsequently to be refuted, by himself, and indeed within the same pamphlet on Imperialism: 'It would be a mistake to believe that this tendency to decay precludes the rapid growth of capitalism. It does not. (...) On the whole, capitalism is growing far more rapidly than before' (ibid.). His thesis on the continuation of technical progress will enable Lenin to relativize even the views of Hilferding on the abolition of free competition, views which Lenin himself initially incorporated into his analysis: Free competition is the basic feature of capitalism, and of commod- ity production generally; monopoly is the exact opposite of free Classical Titeories of Imperialism 23 competition [...] At the same time the monopolies, which have grown out of free competition, do not eliminate the latter, but exist above it and alongside it, and thereby give rise to a number of very acute, intense antagonisms, frictions and conflicts. (ibid.) Lenin's pamphlet on imperialism unquestionably resorts to contradic- tory argumentation. On the one hand, imperialism is presented as decaying capitalism, a position henceforth to be a permanent motif of Soviet Marxism. On the other, it is asserted that in the era of imperial- ism capitalism 'is growing far more rapidly than before'. The fact that the latter thesis comprises the stronger pole of Lenin's argument does not follow only from the fact that it is put forward in his pamphlet in the form of a general conclusion. It emerges much more from the fact that in his later texts Lenin many times had the opportunity to revise the dogmatic adherence of other cadres, in the Bolshevik party, to Hobsonian positions on the parasitism and decay of capitalism. At the 8th Conference of the Russian Communist Party (Bolsheviks) Lenin said, in criticism of Bukharin: Pure imperialism, without the fundamental basis of capitalism, has never existed, does not exist anywhere, and never will exist. This is an incorrect generalisation of everything that was said of the syndicates, cartels, trusts and finance capitalism (...] When Comrade Bukharin stated that an attempt might be made to present an integral picture of the collapse of capitalism and imperialism, we objected to it in the commission, and 1 must object to it here. [...] Nowhere in the world has monopoly capitalism existed in a whole series of branches with- out free competition, nor will it exist. To write of such a system is to write of a system which is false and removed from reality. (CIV, vol. 29) The views on decaying capitalism have little in common with the Marxist concepts of the Critique of Political Economy. According to Marxist theory, capital is the predominant relationship, the predomi- nant mode of organization of a bourgeois society. It is not either an object (a 'thing'), or wealth in general, which a society could indeed acquire from abroad, in this way abandoning its own 'production of health'. Capital is a self-valorizing value (see Milios et al. 2002: 43). " is by definition production for production's sake, accumulation on 3 Continually widening basis. 24 Rethinking Imperialism: A Study of Capitalist Rule Classical Theories of Imperialism 2S The long-term social effect of capitalist relations is the trend towards growth in production and the productivity of labour, a tendency which is only temporarily inhibited by capitalism's cyclical crises, which func- tion on each occasion as points of departure for a new period of capital- ist accumulation: Productivity of labour in general = the maximum of product with minimum of work, hence, to cheapen commodities as much as pos- sible, hi the capitalist mode of production this becomes a law inde- pendent from the will of each separate capitalist [...] However, this immanent tendency of the capital relation will be only realised in its adequate form - and will become a necessary condition, also techno- logically - as soon as the specifically capitalist mode of production will be developed, and with it the real subsumption of labour under capital. (Marx 1969: 63, poorly translated in Marx 1990: 1037-8) Historical evolution (that is to say the development of capitalist produc- tion in the twentieth century in the classic location for the capitalist mode of production, the capitalist industrial countries) confirms the theses of Marxist theory. In the following chapters we will have the opportunity to investigate further the question of capitalist develop- ment and growth. 1.3.3 Capita) exports and the theory of underconsumption Marxist theories of imperialism are at the same time theories of capital export. There are two predominant interpretative schemata seeking to link capital export to the formation of, and domination by, monopolies. (a) The colonial extra profits approach, which claims that colonial or low developed, low wage countries are characterized by higher rates of profit, thus attracting capital from developed countries that seek to maximize it profits: The precondition for the export of capital is the variation in rates of profit, and the export of capital is the means of equal- izing national rates of profit. The level of profit depends upon the organic composition of capital, that is to say, upon the degree of capitalist development. The more advanced it is the lower will be the average rate of profit [...]. The state ensures that human labour in the colonies is available on terms which make possible extra profits (...) The natural wealth of the colonies likewise becomes a source of extra profits by lowering the price of raw materials and reducing the cost price of indus- trial products. (Hiiferding 1981: 315, 328) The surplus of capital approach, the view inherited from Hobson, according to which capital exports are the outcome of restriction, in consequence of the domination by monopolies, of the sphere of capital investment in the overdeveloped capitalist countries. This is the predominant schema on the basis of which capital exports are interpreted in all the classical theories of imperialism, up to and including Bukharin's 1925 polemic against the theses of Luxemburg {Imperialism and the Accumulation of Capital). Hiiferding was henceforth to formulate as follows the position that would deduce capita) export from restrictions of the spheres of capital investment: 'Consequently, while the volume of capital intended for accumulation increases rapidly, investment opportunities con- tract. This contradiction demands a solution, which it finds in the export of capital' (Hiiferding 1981: 234). Both Bukharin in his Imperialism and Global Economy and Lenin in Imperialism restate Hilferding's (and Hobson 's) argumentation on capital export due to an excess of capital in developed countries: Capital export [...( does not represent an isolated phenomenon [..,] is due to a certain overproduction of capital (Bukharin 1972-a: 105). An enormous 'surplus of capital' has arisen in the advanced countries [...]. The need to export capital arises from the fact that in a few countries capitalism has become 'overripe' and (owing to the backward state of agriculture and the poverty of the masses) capital cannot find a field for 'profitable' investment. (Lenin, CW, vol. 22) Luxemburg also believed that theexpansion of capitalism to noncapitalist territories and social 'remnants' constituted the decisive factor which made possible the expanded reproduction of capital (which was other- wise doomed to collapse, due to the lag in society's purchasing power, compared with the supply of capitalistically produced commodities). It is clear that classical Marxist theories of imperialism approach Hobson's argumentation, which belongs entirely in the realm of 26 Rethinking Imperialism: A Study of Capitalist Rule the underconsumptionist theory. In fact, the view that in certain countries there is a permanent restriction of the potential for capital investment, permanent meaning irrespective of the conjunctures of overaccumulatlon crises, and that in this way a permanent surplus of capital is created, can be justified only in terms of the underconsump- tionist theory. In other words a lack of correspondence between con- sumption and production is created precisely because the consumption is from an economic viewpoint not in a position to absorb the continu- ally expanding production. However, as already pointed out (see in this chapter, note 2), this underconsumptionist approach had been refuted in mainstream Marxism following Tugan-Baranow sky's theoretical analysis at the turn of the nineteenth to the twentieth century. Here it is worth recalling that Lenin himself had the opportunity to disaffirm the basic findings of the underconsumptionist theory in the context of his polemic against the Narodniks, the main stream of the Russian left at the time (Milios 1999). Taking as their point of departure the small size of the home market in such a poor country as Russia, the Narodniks considered capitalist devel- opment in Russia to be an impossibility. Lenin argues that in reality (if one does not take into consideration the conjunctures of cyclicaf crises) there can be no 'home market question', since the concrete size of the market in a particular country is a consequence (and a form of appearance) of the level of capitalist development in the country and not a prerequisite for such development. His argument follows two lines of reasoning. On the one hand, the appearance and expanded reproduction of the capitalist mode of production in a particular country brings into exist- ence, and then broadens, the domestic market (in contrast to what is claimed by the Narodniks). This development coincides with the follow- ing processes: (a) creation of demand for capital goods (means of pro- duction) on the part of capital and (b) replacement of the self-sustaining precapitalist economy with the commodity economy, that is conversion of the means of subsistence of the popular masses into commodities. On the other hand, Lenin argues that although in capitalist develop- ment both the productivity of labour and the volume of capitalistically produced commodities tend to increase at a faster rate than that of the growth in popular incomes, this does not lead to a permanent inability to dispose of or realize those capitalistically produced commodities, that is to say it does not inevitably lead to a permanent 'problem of markets'. Even in the absence of external markets or of 'third parties' besides capitalists and workers, the realization problem may be solved by the more rapid increase in productive consumption by capitalists Classical Theories of Imperialism 27 lemand for means of production) than in individual consumption (Lenin, CW, vol. 1: 67-119; vol. 2: 117-257; vol. 3: 42 ff., 312 ff.). The whole dispute is closely related to the Marxist controversy over eco- nomic crises. Lenin unequivocally opposes all underconsumptionist ., preaches (Milios 1994), summarising as follows his arguments on the home market question: From what has been said, it follows automatically that the problem of the home market as a separate, self-sufficient problem not depending on that of the degree of capitalist development does not exist at all. (Lenin, CW, vol. 3: 69, emphasis added). In contrast to these positions, the Lenin of the period of 'Imperialism' seems to have believed that the (limited) consumption of the masses determines the course of capitalist development. What is involved here is a real turnaround in his opinions and his theoretical stance, as Brewer (1980) also correctly points out (for the same conclusion see Howard and King 1989). But it is not only in the works of Lenin that one can find a con- tradictory stance towards the theory of underconsumption. In 1925, Bukharin's Imperialism and the Accumulation of Capital was published in Germany. This work, which is primarily a rejoinder to Luxemburg's Accumulation of Capital, includes one of the most profound Marxist cri- tiques of the theory of underconsumption and so of some of the main theses that, following Hobson's original ideas, had been adopted by Marxist theories of imperialism. Bukharin took his stand on three propositions. First, that the world economy cannot be comprehended as an undifferentiated whole. Second, that capital internationalization does not emerge from a sup- posed 'excess of capital' or a 'lack of investment opportunities' in capital-exporting countries, but from competition between individual capitals, in their search for extra profits on the world market. Third, that there is no inherent and permanently active cause of capitalist crises that could lead to the collapse of capitalism; instead, 'a unity of contradictions' exists, which may (depending on the tension of these contradictions) set a limit to the process of capitalist-expanded repro- duction (which is nothing other than the 'expanded reproduction' of capitalist contradictions). 8 Bukharin defies a taboo position of the socialist movement of that period, namely the notion that real wages cannot rise above a ntinimum required for the physical subsistence of the working classes. 28 Rethinking Imperialism: A Study of Capitalist Rule He recognizes that aggregate real wages can increase under capitalism, to whatever level is required for the uninterrupted reproduction of soci- oeconomic power relations. In his words, the '"limits of consumption" are expanded by production itself, which increases (1) the income of the capitalists, (2) the income of the working class (additional workers) and (3) the constant capital of society (means of production functioning as capital),' And he continues: '(1) the increase in means of production calls forth a growth in the amount of means of consumption; (2) simul- taneously, this increase creates a new demand for these means of con- sumption and as a result (3) a specific level of the production of means of production corresponds to a quite specific level of the production of means of consumption; in other words, the market of means of produc- tion is connected with the market of means of consumption' (Bukharin 1972b: 204, 210). The key aim of Bukharin's criticism of Luxemburg (like Lenin's criti- cism of the Narodniks) was to demonstrate the necessity for abandon- ment of the underconsumptionist postulate of a serious immanent lag of wages behind capital accumulation; indeed, it is such a serious lag that 'it is not possible to compensate for declining personal consump- tion through increasing reproductive consumption' (Moszkowska 1935: 15). On the basis of this problematic Bukharin in 1925 formulated a dif- ferent interpretation of capital export. He wrote: The expansion of capital is conditioned by the movement of profit, its amount and rate, on which the amount depends [...]. If cheaper means of production and cheaper labour are available, the rate of profit climbs accordingly, and capital tries to exploit this situation. If there are other conditions connected with the position of industry, i.e. the geographical situation, conditions which increase the rate ot profit, then capital moves in that direction. Finally, if we have more advantageous conditions to realize the amount of commodities, then again the profit rate climbs, while capital increasingly orientates itself in that direction. As a result of that, the roots of capitalist expansion lie in the conditions of buying as well as in the process of produc- tion itself, and finally in the conditions of selling. |...j The gain- ing of a colonial 'surplus profit' explains the direction of capitalist expansion. That does not mean that the struggle only goes or oniy can go in that direction. On the contrary the further it develops |...| the more it will become a struggle for the capitalist centres as well. In this case, too, the movement of profit is the main reason. (Bukharin 1972b: 256-7) Classical Theories of Imperialism 29 Bukharin replaces the argument about a supposed 'colonial extra profit' ■ {n the criterion of the general level of the profit rate. As noted by Busch ,j974: 258-9), even if there could be surplus capital, the result would not necessarily be capital exports. This 'surplus capital' could equally well be invested in the internal market and be realized in the international mar- ket (export of domestically produced commodities). It is thus not abso- lutely necessary for it to be exported in the form of (money) capital. Bukharin seems to perceive this, as he regards capital exports as one Louipcment in a broader process of 'capitalist expansion' in search of a higher profit rate, in the context of this conception, Bukharin links commodity exports to capital exports and attempts to identify the shared basis of the two processes. His analysis borrows from remarks by Marx in Capital according to which external trade between two countries, each with a different average productivity of labour, enables the more advanced country to derive extra profit. The extra profit is made possible by the commodity in question being produced in a country with a higher productivity of labour than the corresponding International average. Expressed differently, the commodity is sold at a higher international price than its national price. 9 So the development of foreign trade, in Marx's analysis, enables more developed states to reap additional profits and in this way raise the general rate of profit. Bukharin accordingly sees the quest for extra profits as a factor encour- aging both the development of international trade and capital exports: Consequently: (1) if it is an occasional exchange, trade capital gains a surplus profit, using all means, including deceit, violence and rob- bery; (2) If foreign exchange becomes a regular occurrence, the coun- try with a higher structure inevitably gains a surplus profit; (3) if capital is exported, that too happens in order to gain additional profit. (Bukharin 1972b: 245). This formulation of Bukharin establishes the theoretical context for further analysis of the processes of internationalization of capital. The rate of profit and the movement of profit are the decisive 'social index' enabling analysis of the specific forms of movement of capital and of its internationalization. Nevertheless there is a significant absence in Bukharin's argumenta- tion: what is the real relationship between the process of appropriat- ing extra profits through foreign trade (at the expense of a country ^ith a lower labour productivity) and capital exports (towards that less developed country)? Or, to put it another way: Why does the capital of 30 Rethinking Imperialism: A Study of Capitalist Rule a more developed national economy not annihilate on the global market the capitals of less developed countries, as occurs in the domestic mar- ket, where the less developed capitals of a specific sector of the economy either modernize or are effaced? Why is it not enough for the most advanced capitals of the global market that they occupy the dominant position in international trade and resort to the practice of exporting cap- ital? Bukharin does not pose these questions. Nevertheless, as we shall see in Chapter 8 (especially Section 8.2.2), the possibility of understanding the structural characteristics of present-day forms of internationalization of capital depends on the answer to precisely these questions. 1.4 Codification of the theoretical problematic of the classical theories of imperialism Classical theories of imperialism do not merely introduce a new object for theoretical analysis; they also inaugurate a new problematic (con- stituting a new 'theoretical paradigm') within Marxist theory. At the same time, as we shall see in detail in the following chapters of Part I, they represent what is lo this day the basic programmatic framework for positions related to the question. In the contemporary bibliography and discussion on imperialism, one will have difficulty finding theoreti- cal propositions that do not have their roots in classical theories. It is here, precisely, that tfie great theoretical importance of these theories to contemporary Marxist thought is to be situated. Nevertheless, these theories are not altogether unproblematic. They include more than a few contradictions or uncompleted (and undocu- mented) theoretical formulations, and they even to some extent flirt with bourgeois ideology, that is to say they sometimes abandon the theoretical tenain of the Critique of Political Economy. The contemporary relevance of the classical theories is thus obvious when they are considered in the light of present-day controversies over imperialism and 'globalization'. Before proceeding with an analysts of the post-war and contemporary views of imperialism it will be necessary to summarize the basic prob- lematic of the classical theories. For all the classical Marxist theories there is a causal relationship between the structural characteristics of contemporary ('monopoly') capitalism and the imperialist expansion of capital. The classical theo- ries of imperialism maintain that the specific forms assumed by the internationalization of capital and imperialist policies were in their day a necessary expression and outcome of the structural characteristics of monopoly capitalism. Classical Theories of imperialism 31 The colonialism and protectionism which, as we now know, were nierely historic forms of imperialist policies, forms that predominated inly until World War II, were perceived by the classical theories as struc- tural features of the 'latest phase' of capitalism, as a necessary outcome f transformation of 'old capitalism' into 'monopoly capitalism'. Lenin, for example, repeatedly asserted that liberalization of international trade was inconceivable, a 'utopia'. The thesis that 'Capitalism is grow- ing w ' tn tne greatest rapidity in the colonies and in overseas countries' (Lenin, CIV, vol. 22) is a similar arbitrary theorization of historic epi- phenomena. Of course, this thesis is confirmed by some former colo- nies, for example, Canada or Australia, but it proves mistaken for others fsuch as, for example, India, or the countries of Africa. Both political and theoretical factors, in our opinion, lie behind this arbitrary empiricist theorization of historical forms of appearance of capitalist domination. The political factors have to do with the goals of the classical theories of Imperialism: present-day capitalism had to be presented as a social system that cannot be 'improved' or reformed. But it is the theoretical factors that are more decisive. Here what is involved is in the first instance confusion between two theoreti- cal objects: contemporary capitalism and expansion of capital. Tills confusion-conflation is a common element in all classical theories of imperial- ism. Thus expansion of capitalism (imperialism in the narrow sense) is regarded not merely as an immediate and necessary result of domination by monopolies, but is often equated with the rule of monopolies itself. Further, this reduction of imperialism to 'rule of monopolies' downgrades (imperialist) policy to a simple reflection of the economic base. What this does not take into account is the relative autonomy of the political, as for example, expressed in the historically conditioned antagonism between certain bourgeois states, and in the innate tendency towards expansion of the boundaries of sovereignty of the bourgeois state, particularly when the 'national questions', etc. remain open. National antagonisms are indeed typically the factor that overdetermines the developmental tendencies at the economic level leading, sometimes, to imperialist wars. When the role of politics is not given its due weight, the theoretical a nalysis veers off into economic reductionism, making it impossible for mere to be a reliable approach to the characteristics, the developmental tendencies and the contradictions of modern capitalism. Lenin, for 'nstance, is right when he says that the basis for the division into s pheres of domination and influence of the different imperialist 32 Rethinking Imperialism: A Study of Capitalist Rule countries can be nothing other than the overall power of each one of those countries. But this general formulation is insufficient in the absence of supplementation by concrete analysis of the international political conjuncture, so that the specific form of the interimperialist contradictions, which are different in each case, can be identified. After the First World War, to give an example, the United States had already emerged as the most powerful imperialist country, both economically and militarily. This shift in the international balance ot forces to the advantage of the United States did not lead to this country challenging British global imperialist hegemony in a politico-military manner. The United States did emerge finally as the hegemonic imperialist power, displacing Britain, but after an imperialist war in which the US not only did not take the initiative but on the contrary allied with Britain against the German-Italian endeavour to establish a "new order" in Europe. It is therefore necessary at all times to avoid the economic schematization entailed by a mechanistic equation of the process of internationalization and international expansion of capitalis- tic dominance with the developmental process of the forms of capitalist domination itself. Our discussion of classical Marxist theories of imperialism opened up some important theoretical issues that can be summarized as follows: (1) Imperialist internationalization of capitalism is to be approached not as a 'global capitalist structure' but rather from the starting point of Lenin's notion of the imperialist chain. (2) The view of imperialism as 'decaying capitalism' or capitalism 'in its death agony' has very little connection either with Marxist theory or with empirical reality. (3) The notions of domination by monopolies introduced by the clas- sical theories of imperialism must be subjected to more rigorous analysis. (4) Finally, capital exports and the resulting internationalization of capital are not explicable by the existence of surplus capital in developed capitalist countries. They are linked to international differentiations in the rate of profit and commercial capitalist com- petition on the international market. We propose in the following chapters to include questions such as these in our investigation. post- World War II 'Metropolis-Periphery' Theories of Imperialism 2.1 Introductory comments: The issue of dependency After World War 11 and the national liberation movements which fol- lowed, most former colonies won their national independence, leading to the dissolution of empires and the end of colonialism. Most post-war Marxist approaches to imperialism take it for granted, however, that ex-colonies and developing countries are still subordinated to imperialist countries through relations of dependency. For instance, as Popov stated: 'a special type of development of the countries dependent on imperial- ism is characteristic of the international capitalist division of labour within the framework of the world capitalist system. The dependence created by colonialism is still manifested in all the key spheres of the developing countries' economic life' (Popov 1984: 119). 1 The notion of dependency played a key role in most post- World War 11 approaches to capitalism, imperialism and the state. Together with the related concept of world capitalism, it is to be found not only in the centre- periphery theories but also in the most heterodox versions of the political economy of development. The dependency theory assumes that despite the fall of colonialism after World War II and the creation of dozens of new states in former colonies, the periodization of capitalism, as proposed by classic dieories of imperialism, is still an intellectually valid hypothesis. Shaped in the context of classical theories of imperialism, the con- cept of 'global capitalism' underlay, after the Second World War, all theoretical approaches that perceive international economic relation- ships as relationships of exploitation and polarization between a devel- °Ped imperialist centre and a dependent periphery. Because of their shared theoretical conclusions, to which we have just referred, these a PUroaches are called 'metropolis-periphery' theories. 33 34 Rethinking Imperialism: A Study of Capitalist Rule We propose in this chapter to give a presentation of these metropolis- periphery theories, placing primary emphasis on those that have tended to predominate in this international current. We will accordingly be paying particular attention to the Latin-American approaches to dependency, the theory of unequal exchange, the theory of global accu- mulation, the views of the 'Monthly Review School', and the theory of the new international division of labour. Finally, we will be presenting the views of two Latin-American theoreticians of the metropolis-periphery current, Cordova and Cardoso, who attempted to refute some of the basic theses of the 'Monthly Review School'. Our aim is to advance our critique by presenting the key points of the theories under investigation in such a way as to highlight their internal contradictions, 2.2 The traditional approach Within the framework of the dependency and centre-periphery approach two complementary orientations have developed. The key focus of the first is on the study of the global economy, highlighting the imbalance in global production and international trade, international capital movements, etc. It thus identifies and describes a continuing transfer of resources from the Third World to the metropolis, a draining of raw materials from the periphery - in short, the 'exploitation ol the periphery' by imperialist capital. This 'plunder' of the countries of the periphery by imperialism, a by-product of their dependence, is con- sidered to be the cause of their underdevelopment. Dependence is thus, according to all the theories we examine here, the key term for interpreting the development and the character of the periphery, 2 The second orientation within the framework of traditional analy- sis, and also the most prevalent, focuses above all on the effects of dependence on internal structures at the periphery (predominance of foreign capital, economic, political, technological, cultural depend- ence, etc.). Dependence, it is asserted, creates the underdevelopment. Underdevelopment is closely linked to social inequality, unemploy- ment, marginalization and the impoverishment of a great part of the population. Social marginalization and poverty keep the consumer potential of the population at a low level, placing parallel constraints and limitations on economic development. Imperialist dependence at the same time distorts the peripheral economy, imposing on it the requirement to specialize in a limited number of low-technology prod- ucts, which are manufactured at a relatively low cost on account of the low wages, and are exported to the metropolis. The peripheral economy W 'Metropolis-Periphery' Theories of Imperialism 35 s thus characterized by distortion and introversion. The industrial development ttiat has been observed in recent years in certain Third yjotld countries is in no way Incompatible with the basic characteristics of dependent and marginalized development. 3 j\li these features of the periphery are regarded, as we have said, as the result, first and foremost, of imperialist dependence and exploitation. They are, that is to say, a by-product of the global capitalist division of labour, of 'global capitalism', one of whose aspects is development and the other underdevelopment. Underdevelopment is thus not an early stage in development, ft is, in the context of the global capitalist system, the neces- sary and permanent consequence of the predominance of metropolitan capital- ism. Underdevelopment results from 'innumerable exogenous factors, which are nevertheless to be considered to be endogenous in the con- text of the international capitalist system, of which our communities comprise only a part' (Cordova 1973: 13). Samir Amin summarizes the theses of the traditional approach as follows: Despite their different origins, the peripheral formations tend to converge towards a pattern that is essentially the same. This phe- nomenon reflects, on the global scale, the increasing power of capitalism to unify. All peripheral formations have four main char- acteristics in common: (1) the predominance of agrarian capitalism in the national sector; (2) the creation of a local, mainly merchant, bourgeoisie in the wake of dominant foreign capital; (3) a tendency towards a peculiar bureaucratic development, specific to the contem- porary periphery; and (4) the incomplete, specific character of the phenomena of proletarianization. (Amin 1976: 333) The traditional approach is the basic matrix out of which most analy- ses of peripheral capitalism will emerge, 2.3 Deformation of the socio-economic structure: Dualism, disarticulation, structural heterogeneity •lie theory of dualism is the oldest and has been comprehensively elabo- rated by the Hungarian economist Tamas Szentes (1974, 2003). Szentes maintains that as a result of dependence, the underdeveloped countries are composed of two self-contained sectors: a 'modern', that is to say capi- 'alist and relatively developed sector of the economy, and a 'traditional' sector with exceptionally low productivity, based on precapitalist modes of 36 Rethinking Imperialism: A Study of Capitalist Rate production and exploitation. These two sectors remain, according to this theory, separate. Dualism thus aiso implies inner disarticulation in under- developed countries, which essentially comprise 'two communities'. One consequence of their disarticulation is that the effects of any development in the modern sector are not passed on to the rest of the community. On the contrary, this sector retains its basic links only with the foreign factor, the global economy. It has been created as a result of dependence and it perpetuates that dependence. It serves the needs of the global market, not the internal-national market, which remains narrow and without dyna- mism. The modern capitalist sector is in no way incompatible with under- development. It simply assumes the character of an enclave within the peripheral communities. Dualism therefore implies inner disarticulation. This disarticulation is in turn directly linked to outer-directedness. Theorists of peripheral capitalism modify to a greater or lesser extent the theory of dualism, selecting certain elements and rejecting others. 4 Theorists of one tendency in Latin America would maintain that the predominant element is inner disarticulation of the peripheral economy in consequence of the developed sector's being oriented chiefly towards the global market. This disarticulation however, they continue, does not create 'two communities', as is maintained by the theory of dual- ism. It simply weakens the internal cohesion of the single peripheral community (Cardoso 1973, 1974). But the theory of dualism is subject to criticism from another view- point also, which maintains that inner disarticulation of the peripheral economy is so pronounced that jOjne ought not to speak of underdeveloped national economies, but to reserve the adjective 'national' to the autocentric advanced economies [...j. The underdeveloped economy is made up of sectors, of firms that are juxtaposed and not highly integrated among them- selves, but are each of them strongly integrated into entities the cent- ers of gravity of which lie in the centres of the capitalist world. What we have here is not a nation in the economic sense of the word, with an integrated internal market. {Amin 1976: 238) This approach rejects the theory of dualism for another reason as well. It maintains that in the periphery there are no non-capitalist modes of production (a hypothesis in which the theory of dualism is grounded), in that all 'sectors' of the periphery are considered capitalist once they begin to produce for the market. The question of pre-capilalist modes 'Metropolis-Periphery' Titeories of imperialism 37 { production and their expanded reproduction owing to dependence recalls the theory of 'structural heterogeneity' propounded by Cordova: The term 'structural heterogeneity' should not be confused with the familiar thesis on economic and social dualism. In Latin-American countries there are not two communities one next to the other as main- tained by this thesis. By the tenn heterogeneity of the socio-economic structures of an entity we understand the existence of economic sectors in which relations of production are predominant that are based on dif- ferent property relationships among the agents of production, A hetero- geneous socio-economic structure entails a heterogeneous class system. Heterogeneity in the socio-economic and class structure produces a cor- responding heterogeneity at the different levels of the superstructure, (Cordova 1973: 26-7 and 64) At the same time, it is asserted that the 'structural heterogeneity' causes a 'structural deformation', that is to say, capitalist development acquires an unbalanced and deformed character. Structural deformation is not however regarded as the result of a disarticulation of the capitalist sector under the influence of non -capita list sectors of the economy but as an outcome that emerges from the specific mode of articulation of these sectors between themselves. Naturally for Cordova too, structural heterogeneity is no more than the necessary result of the predominance of metropolitan capitalism over peripheral social formations on account of the splitting of 'global capitalism' into an imperialist metropolis and a dependent (and heterogeneous) periphery. 2.4 The theory of unequal exchange The theory of unequal exchange was developed in France by Arghiri Emmanuel (1972). Emmanuel maintains that in the context of the global niarket, developed and underdeveloped countries become differentiated from each other, forming two entirely separate groups, which are basi- cally non-antagonistic towards each other because they are specialized » the manufacture of different products. Exchanges between these two JPoups of countries are unequal, that is to say, they involve a continuous transfer of resources from the underdeveloped countries to the group of developed countries. It is this inherently unequal exchange that sustains ^d reproduces the polarization between development and underdevel- °pment. Unequal exchanges, it is asserted, are attributable to a radically unequal level of wages as between the two groups of countries. 38 Rethinking Imperialism: A Study of Capitalist Rule 'Metropolis-Periphery' Theories of Imperialism 39 Emaiuiuel starts from three basic hypotheses. Firstly, in consequence of the international mobility of capital, an international average rate of profit is generated. At the same time international production prices are established on the global market. Secondly, wages at the national level, though different from country to country, have the tendency to polar- ize finally at two global levels: high wages in the countries of the centre and much lower wages at the periphery. This polarization stems from the 'immobility of the labour factor' on the global market (Emmanuel 1972: xxxv). Thirdly, in the system of international exchanges, the independ- ent variable is wages, which are set not on the basis of some 'econom in- laws' but by historical and social factors (Emmanuel 1972: 64 ff.). The fact, then, that on the global market a single rate of profit is established, while polarization is perpetuated at the level of wages (which is 'in the immediate sense, ethical', ibid.: 120), results in unequal exchange, in the sense of an exchange of unequal quantities of labour, expended in the production of internationally traded commodities. So 'wealth begets wealth' and 'poverty begets poverty' (ibid.: 214-15) in a system, however, where 'development is represented not as a cause but as a result of high wages' (ibid.: 254). Accordingly, 'if we suppose that for some reason, political, syndicalist or otherwise, wages in the Third World were suddenly made five or ten times higher and wages in the developed countries fell to the same level, the greater part of today's international division of labour would be bankrupted, although no objective factor of production would have changed' (ibid.: 131). Commencing from the thesis that wage differentials in the global economy are huge, in contrast to rates of profit, which fluctuate around comparable levels, Emmanuel pursues his train of thought within the framework of the ('classical', see Milios et al. 2002: 13 ff.) labour theory of value, to come to the conclusion that the process ot equalizing rates of profit on a global scale will transfer profit continu- ally from low- wage countries to high-wage countries. The basic pre- supposition of such a notion is that all countries have access to the same technology. It is thus assumed that both the low-paid and the high-paid workers produce almost the same amount of value per hour, whereas prices in the low-wage countries are lower because of the lower production costs. 'Unequal exchange' is thus defined as 'the proportion between equilibrium prices that is established through the equalization of profits between regions in which the rate of surplus value is 'institu- tionally' different - the term 'institutionally' meaning that these rates are, for whatever reason, safeguarded from competitive equalization' (Emmanuel 1972: 64). Emmanuel deduces from his theory a number of political conclu- jxms. The basic one is that unequal exchange and international spe- jallzation establish a system of exploitation of some countries by other ^Minifies. It is not a question therefore of the popular classes of the countries of the Third World being exploited by imperialist capital {in parallel with exploitation by 'their own' national capital). It is a question of joint exploitation of the periphery by the developed countries. International solidarity on the part of the workers' move- ment no longer serves any purpose. On the contrary, the working classes of the centre have been transformed into the workers' aris- tocracy of the global system, enjoying the benefits, together with the capitalists of the centre, of exploitation of the underdeveloped countries (ibid.: 179). 2.5 Bettelheim's intervention and the theory of accumulation on a global scale In his Theoretical Comments that were published as Appendix I together with Emmanuel's essay, Charles Bettelheim subjected unequal exchange criticism from the viewpoint of the concepts and categories of arxist theory. Bettelheim made it clear at the outset that in the arxist view 'commodity exchange necessarily takes the form of equal 'change' (Bettelheim 1972: 272), so that it is inappropriate to maintain, as Emmanuel essentially does, that 'there exists "independently of and prior to" imperialist exploitation (in the sense of exploitation through capital investment) a "commercial exploitation" of the colonial or semi- colonial countries' (ibid.: 275). Bettelheim was even to maintain that Emmanuel's thesis on wages constituting an independent variable is totally without foundation. Low wages correspond to certain socio-economic structures with a low el of development of the productive forces and low organic com- tion of capital. They are however in the final analysis determined by overall structure of each specific social formation (ibid.: 291). The term 'exploitation' denotes certain class relations of production, referring to a specific social -class structure in the context of each specific country. Henceforth: jljt is necessary to think of each 'country' as constituting a social formation with a specific structure, in particular because of the existence of classes with contradictory interests. It is this structure 40 Rethinking Imperialism: A Study of Capitalist Rule that determines the way in which each social formation fits into international production relations. (ibid.: 300) Presenting exploitation of countries by other countries, Emmanuel remains at the level of the outward effects that the social relations of production have on exchange, in this way concealing those relations. This is tantamount to concealing imperialist exploitation. 5 Summarizing these conclusions, Bettelheim argued that Emmanuel's analysis is 'pre- critical', which is to say that in the realm of theory it lags behind the gains of the Marxist critique of political economy. Emmanuel's theory was to be accepted by a considerable number of exponents of the metropolis-periphery current. The best known of them was Samir Amin, who undertook the defence of the Marxist char- acter of this theory from Bettelheim's criticism (and also from criticism by others). Amin (1976: 138 ff.) adopted the main theses of the theoreti- cal schema of unequal exchange but modified it in order to moderate its extreme theoretical and political implications, which as we have seen Emmanuel did not hesitate to emphasize. 6 To be more specific, Amin endeavoured to rescue the theory of unequal exchange by means of his theory on accumulation on a glo- bal scale. According to this theory the polarization of wage levels that characterizes the global capitalist system arose out of the different types of development pursued by the metropolis and the periphery, correspondingly. This implied acknowledgement that wages are not an 'independent variable'. High wages are the result of the developmental model pursued at the centre, the model of 'autocentric' development. Correspondingly, the low wages of the periphery derive from the model of 'extraverted' capital accumulation and development imposed on the periphery by imperialism. In other words, unequal exchange is less the cause and more an effect of the deformation and underdevelopment of the Third World. Thus, according to Amin, in an autocentric system it is presup- posed that there is simultaneous existence, close interconnection and parallel development, of the sector that produces goods for mass consumption and the sector that produces capital goods. It is for this reason, he concludes, that accumulation requires continual expansion of the internal market and so of the wages on which the expansion of the market for consumer goods depends. By contrast, development at the periphery does not require expansion of the internal market and so of wages, because the system is extraverted. Therefore, while 'Metropolis-Periphery' Tlieories of Imperialism 41 w e have one value of labour power, which is its global value, according to Amin two different prices are imposed for the labour power, one above the value and the other beneath it. 7 It is from the polarization i wages that unequal exchange then arises, according to the schema formulated by Emmanuel. However, Bettelheim had even prior to this voiced his disagreement vflth the theory of international value of labour power that underlies Amin's analysis: 'The law of value [...] tends [...] to reproduce the conditions of reproduction specific to each of the different social formations, which means that the wage level 'proper' to each social formation cannot be determined by the 'world level of development of the productive forces' (which is merely a false abstraction in a world I system made up of distinct and opposed social formations), but that [t is fundamentally linked with the specific combination of productive forces and production relations characteristic to each social formation' (Bettelheim 1972: 296). 2.6 The theory of surplus In 1966 Baran and Sweezy were to write Monopoly Capitalism (Baran and Sweezy 1968). In this book the authors put forward the view that 'the economic surplus [...] is the difference between what the society produces and the costs of producing it' {ibid,: 23). The term 'surplus', to reiterate, can be applied in the context of any mode of production in any society. Nevertheless, it is worth noting that in their subsequent analyses the authors adopt a new definition which appears to correspond to the Marxist category of surplus value (or of surplus product, in the case of non-capitalist modes of production). But Baran and Sweezy say that [II n a highly developed monopoly capitalist society, the surplus assumes many forms and disguises, (...) the revenues of state and church, the expenses of transforming commodities into money, and the wages of unproductive workers. In general, however, he [Marx] treated these as secondary factors and excluded them from bis basic theoretical schema. It is our contention that under monopoly capitalism this pro- cedure is no longer justified, and we hope that a change in terminology will help to effect the needed shift in theoretical position. (ibid.: 23) The basic thesis of Baran and Sweezy is that it is a law of monopoly ^pitalism that the surplus has the tendency to rise both absolutely and 42 Rethinking Imperialism: A Study of Capital is t Rule relatively. To quote: This law immediately invites comparison [...] with the classical- Marxian law of the falling tendency of I he rate of profit. [...) By substituting the law of rising surplus for the law of falling profit [...] we are simply taking account of the undoubted fact that the struc- ture of the capitalist economy has undergone a fundamental change since that theorem was formulated. What is most essential about the structural change from competitive to monopoly capitalism finds its theoretical expression in this substitution. (ibid.: 80-1 ) The main conclusion to be derived from this 'law of rising surplus' is that monopoly capital strives continually to find outlets for this surplus in order to keep the system from sinking into economic crisis, as all tra- ditional domestic spheres of capitalist consumption and investment fall short. Military spending and imperialist expansion were thus regarded by the authors as countervailing tendencies to the inherent tendency towards stagnation in developed monopoly capitalism. 8 2.7 The global (capitalist) economy, underdeveloped capitalism and the semi-peripheral countries All the metropolis-periphery theories presuppose, as we have said, the priority of the global economy, and global and economic and social relations over the economic processes and social relations thai govern the national social formations. Global processes, in other words, override processes taking place within each social forma- tion and predicating the evolution of the latter. Underdevelopment is primarily the result of dependence and of the division of labour imposed by global capitalism. As Cordova has already informed us (Cordova 1973: 13), it arises out of 'innumerable exogenous factors that are nevertheless endogenous in the context of the international capitalist system'. This formulation expresses the inner 'logic' of the theories we are examining here. 9 An analysis of the global capitalist economy and underdeveloped capitalism has been elaborated from this common starting point, with Frank and Wallerstein as the key exponents. 1 " According to it, from the moment that the global market was created, that is, roughly from the sixteenth century onwards, humanity as a whole (that is to say all the areas linked to or comprising the global market) 'Metropolis-Periphery' Theories of Imperialism 43 has been capitalistic, polarized between metropolis and periphery and oer vaded by monopolistic structures. The global economy and (global) capitalism are, by this logic, synonymous terms. In Wallerstein's (1979: 44, 47) formulation capitalism is 'a mode of production in which the [jjective is to produce profit on the market. Capitalism has from the outset been a matter of the global economy, not of national states.' So It is pointless, and mistaken, to speak of other, pre-capitalist modes of production, or of socialism, employing as one's criterion the relation between producers and the means of production, the form of the state, etc. (ibid.: 63). Within the parameters of the same schema, Frank (1969) was to assert that capitalist development and underdevelopment is predi- cated on three fundamental antitheses: extraction/appropriation of the economic surplus, polarization between metropolitan and satel- lite countries, and the conflict between continuity and development. On the basis of the assumption that all productive processes that involve the market are capitalist, Frank was to come out in opposition to all the theories that link the underdevelopment of the periphery to domination by, or even preservadon of, expanded reproduction of certain pre-capitalist modes of production. As part of the global system, he would assert, the periphery has always been capitalistic. The capi- talism of the periphery is simply different from the capitalism of the metropolis. It is an underdeveloped capitalism. What takes place at the periphery is 'the development of underdevelopment' (Amin 1976; 198 ff.). 11 Similarly, the toiling and exploited masses belong to the (global) proletariat, but again this proletariat is different from the proletariat of the metropolitan centres. 12 The global system finally takes shape, according to Frank, as an integrated colonial system whose structure may be compared to that of a solar system of planets revolving around a sun. The metropolitan centres are enriched by the satellites. But there may be other satellites revolving around a satellite, dependent on it. This is a fundamental ^d permanent feature of the global system. 13 One consequence of this solar structure of the global system is however that some intermediate regions inevitably come into existence between the metropolis and the Periphery: the semi-peripheral or sub-imperialist states. As Wallerstein U-979: 50-2) explains: 14 [T]he structural differentiations between the centre and the periphery cannot be explained adequately if we do not take it into account that there is a third structurally determined position: the 44 Rethinking Imperialism: A Study of Capitalist Rule position of the semi-periphery. The semi-periphery is necessary for the global economy to be able to function without friction This semi-periphery is to some extent accorded a special economic role, which however is more necessary politically than economi- cally [...] the absence of a semi-periphery would imply a polarized international system. Frank (1 984:9 1-3) explained at the same time that the term sub-imperialism or semi- periphery was a way of describing countries that 'participate in a different way' in the international social division of labour, that is to say, they export not only raw materials and light industrial products but also products derived from heavy industry. 15 Semi-peripheries or sub-imperialist countries are terms which allow dependency theoreticians to incorporate into their models the histori- cal processes of capitalist development of certain Third World countries. It is therefore understandable that the content of these terms should continually change in step with the changing economic reality. In 1982 Amin formulated, as follows, his theses concerning semi-peripheries and the centre-periphery polarisation: [l]n the mercantilist and competitive capitalist stages, there were many semi peripheral situations (using the term as Wallerstein does} that could have risen to the rank of the core. But by the end of the nineteenth century the extent of world domination of core capital was already such that it precluded this possibility from then on. In other words, there is not and there never will be a 'new Japan' after Japan. (Amin et al. 1982: 168, emphasis added) Two decades later he modified his view as follows: During the 'Bandung period' (195S-75), Third World countries practiced self-reliant development policies with the aim of reducing global polarization ('catching up') [...J The uneven results of this industrialization, imposed upon dominant capital by social forces issuing from national liberation victories, allow us to distinguish today between first-rank peripheries, which have managed to build national productive systems capable of competing in the framework of global capitalism, and marginal peripheries, which have not been able to achieve this. (Amin 2003: 13) 'Metropolis-Periphery' Tlteories of Imperialism 45 2-8 The 'new international division of labour' jyJosi of the writers in the centre-periphery current of thought adopt the problematic of Wallerstein, namely that since the time of its estab- lishment, the global economy has been polarized between a capital- ist metropolis and a capitalist periphery, along with the existence in parallel of a few intermediate 'semi-peripheries' and dominated by monopolistic structures. However, as already suggested in the previous section of this chapter, capitalist development of certain countries in the 'periphery' necessitates constant expansion of this 'intermediate space' of the 'semi-periphery'. So, from the viewpoint of this theoretical perspective on the 'global economy', the capitalist restructuring that is observable in different countries in recent decades is a matter of simple sub-instances of transformation of the global capitalist system, leading to a 'new international division of labour'. As Frdbel et al. (1983: 30-1) explain: For the first time in the last five hundred years of history of the global economy it is possible today for a rentable manufacturing industry in the framework of world economy to develop on a large and expanding scale in the developing countries. [...] We call this qualitatively new development in the global economy 'the new international division of labour'. On these assumptions the 'new international division of labour' arose out of global capitalism's tendency to maximize its profits. It is the pro- cedure by means of which global capitalism attempts to overcome its crisis. Through the shifting of production of certain commodities to the Third World, the cost of producing them is reduced precisely because wages in the Third World remain exceptionally low. The 'inexhaustible dynamic' of cheap labour power is the key factor behind the shift of production to the Third World. It is moreover facilitated by a breaking down of the productive process into separate procedures through the introduction of new technologies. Many of these procedures can be car- fled out by a non-specialist workforce. Developments in transport and communications make it possible for the overall production process to be spread over a greater number of countries. The analysis of Lipietz (1983) is informed by a similar problematic. Starting again from the position that 'the general laws of the capitalist Itnode of production are valid only at the level of the global system' ('bid.: 56), he takes the position that . 46 Rethinking Imperialism: A Study of Capitalist Rule 'Metropolis-Periphery' Theories of Imperialism 47 [[|n order to emerge from the crisis, imperialism must construct a new division of labour that will relegate countries to one of three categories: * A metropolis that will dispose over the most advanced technology and the strategic products: the USA. * Countries engaging in special construction work. * Countries for assembly and non-specialized mass production, (ibid.: 95) Lipietz then surmises that the 'international division of labour' schema can also be implemented inside the metropolitan social for- mations, where, as a result of the articulation of a variety of modes of production, different types of 'periphery' are created. 2.9 The metropolis-periphery current and the Monthly Review School The theories we present here are certainly distinct from each other, but all in all not mutually contradictory. We have already identified an obvious antagonism between theories of dualism, and of structural het- erogeneity, and the theory of underdeveloped capitalism that precludes the existence of non-capitalist modes of production at the periphery. But we shall concern ourselves with matters of this kind in the imme- diately following section of this chapter. What concerns us here is the predominant element, the element of convergence. It is this conver- gence that makes the metropolis-periphery theories into a single cur- rent. There are two intermediate elements that sustain this convergence of all the theories into one strand: 1. A conception of the global capitalist system. From this conception, as we have already noted, it transpires that the global processes have prior- ity over the national processes, and that development (and the under- development of the periphery) is determined by the development options of the imperialistic metropolis, with the result that the key fact about social relations at the periphery is their dependent character. 2. A conception of imperialism in which the predatory rule of Hie metropolis over the periphery is seen as the essential characteristic of the global system. This conception rediscovers common ground with the positions on imperialism formulated, above all, by Rosa Luxemburg. rel coi These two conceptions evidently establish the basic profile of the letropolis and the periphery, that is to say the two poles, the two key ctures of capitalism in the light of all the theories we examine here. ey are the framework of shared assumption behind every theory of the metropolis and the periphery. We do not intend to go into the details of the abovementioned controversy, but will focus on some shared view- ints, irrespective of whether the writers adopting them think that iey characterize global history for 500 or 5,000 years. In these theories ie concept of imperialism is linked to the relations of dominance that aracterize in the most general sense the relation between the devel- countries of the centre and the developing countries of the peri- phery. From this viewpoint imperialism embodies the structural (global) lations of dependence (or, to put it differently, 'hegemony'} and so nstitutes an organic (and probably insurmountable) element of the global system. 16 It could of course be argued that it is a precondition for establishment of the individual states and a dominant contradiction above and beyond the other political and social contradictions: the imperialism of dependence is at the heart of global capitalism. It is its .key element. The powerful economies of the centre shape the relations der which production in the peripheral economies is carried out, continually absorbing surplus value from them. International organiza- tions, such as the World Bank and the International Monetary Fund, operate under the control of the countries of the centre, promoting ieir specific vested interests. The capitalist centre is responsible for the underdevelopment of the periphery. It is in the context of the metropolis-periphery current that a narrower convergence is effected between a number of theories, a convergence at finds expression in the so-called Monthly Review School (from the urnal of the same name which the chief representatives of the school iblish and by means of which they make their interventions). 17 The convergence involves on the one hand the theories of Emmanuel id Amin of unequal exchange and global accumulation, and on the er Baran-Sweezy's theory of surplus and Wallerstein and Frank's eory of underdeveloped capitalism. Some elements of the traditional analysis of the periphery are necessarily adopted. As for distorted elopment at the periphery, this school maintains, as we have said, that there are different categories of peripheral country and that each :ends to be linked in its own particular way to the metropolis, so that Is not appropriate to speak generally of national social formations t the periphery. Worth noting here are two ideological elements that haracterize the 'Monthly Review School': 48 Rethinking Imfiiriiilism: A Study of Capitalist Ride 'Metropolis-Periphery' Theories of imperialism 49 The first has to do with a peculiar attitude towards the market arnj in particular the world market. This 'market' is identified as the dis- languishing, and predominant, characteristic of the CMP (every typ e of production that is oriented towards the market is capitalism, with, out any reference to the specific relation of labour to the means of production and their economic owners. Increased wages, that is to say, the expanded domestic market for consumer goods, is the decisive crite- rion for 'autocentric development'. Exploitation of the periphery arises out of instances of unequal exchange on the world market, etc.). The second appears to have been influenced by the view, first formu- lated by Bukharin, that the global capitalist system is a single uniform class structure, within the framework of which the ruling bourgeois classes unite in a single hierarchically organized bloc, notwithstanding the intra-bourgeois contradictions, in exactly the same way as occurs with the bourgeois classes of an individual capitalist country. Amin (1976: 360, 196) comments characteristically: The contradiction is not between the bourgeois and the proletariat of each country considered in isolation but between the world bourgeoisie and the world proletariat. (...) [Tjhe world bourgeoisie consists princi- pally of the bourgeoisie of the center and, secondarily, the bourgeoisie that has been constituted In its wake, at the periphery. The bourgeoisie of the center, the only one that exists at the scale of the world system, exploits the proletariat everywhere, at the center and at the periphery, but [...j it exploits the proletariat of the periphery even more brutally. It is from this schema that the school's 'Third Worldist' political conclusions emerge: it is almost exclusively at the periphery that social change can come into existence. But what kind of change will it be, given that the main, the real 'enemy', is not there, at the periphery, but at the centre? Obviously the revolutionary masses of the periphery can strike at the 'enemy' only indirectly. And in any case the desideratum for them cannot be to crush 'their own' bourgeois state but to fight for 'national independence' and 'autocentric' development. The theory ot the global bourgeoisie that the school has adopted supplants the Marxist theory that the state is the level par excellence at which bourgeois class (political) domination is concentrated (see Part 11 of the book), 2.10 The critique of Cordova and Cardoso The theoretical disagreements between the 'Monthly Review School and some Marxists of the metropolis- periphery current who support different • e wpoints are not limited merely to questions pertaining to deformation r social and economic life at the periphery. On the contrary, the discus- ion a nQ " me cr,t 'q ue have been expanded to some broader theoretical questions with a bearing on the internal coherence of the theories pre- sented here. Of particular significance in this respect are, in our opinion, the theoretical interventions of two Latin American theorists of the metropolis-periphery current, Cordova and Cardoso. The former directed his critique primarily against the theory of 'underdeveloped capitalism' as formulated by Frank (but also against the theory of sur- plus), the latter against the theories that deal with the (non) expansion of the domestic market. Cordova (1973) opens his analysis with references to the concepts of surplus introduced by Baran and deployed by Frank. He reaches the conclusion that given the way these concepts are formulated for society as a whole, they tend to conceal the specific class-exploitative charac- ter of the relations of production. By contrast, the concepts of surplus value, of land rent, of surplus product, etc. introduced by Marx illumi- nate precisely these specific exploitative relationships, that is to say the class struggle. 1 " Cordova (ibid.: 124) thus concludes: 'there is no reason to replace the Marxist categories of surplus value, surplus product, surplus labour, etc., with the term "social surplus"'. He was subsequently to maintain that the process of 'extraction/ appropriation of the economic surplus' was not, as Frank believed, the specific characteristic of capitalism but rather the basic contradiction in every mode of production and every class society. The distinguishing feature of capitalism is production and abstraction/appropriation of the surplus value of the free worker by the capitalist, possessor and owner of the means of production. But Prank and Wallerstein see only the market, deploying a definition of capitalism that conceals precisely this relationship between capital and labour. C6rdova rejects both the thesis that the societies of Latin America Were fully capitalistic as early as the sixteenth century (as they con- tained relations of slavery and forced labour, etc.), and the thesis that they have been monopolistic since that time. Thus, in the socie- ties of the periphery there is not a homogeneous 'underdeveloped Ca pitalism* but 'a complex mosaic of relationships and accordingly of ways of extracting surplus labour' (ibid.: 136). Dependency at the Periphery, Cordova was to assert, allows for expanded reproduction °I the pre-capitalist relations that are associated with underdevel- opment. He was in fact to argue as follows: 'although the extreme SO Rethinking Imperialism: A Study of Capitalist Rule dependence of Canada on the USA is today obvious, nobody would say that Canada is an underdeveloped country. Why? Because in Canada the network of pre-capitalist relations, with which capitalism has been associated in our countries, is absent' {ibid.: 148). Frank, Cordova continues: |A)bdicates consideration of the role of social class, because clearly it is unnecessary. In his system of metropoles and satellites, exploitation is not exploitation of certain classes by other classes, but is a con- sequence of the hierarchical levels whereby each sector alienates its immediate inferior, to be alienated in turn by its immediate superior. {ibid.: 150) Marxist analysis is obliged (contrary to Frank's theory that the only 'totality' is the global economy) to take into account the class relations and the economic structure of each specific social formation: Because colonization takes place on the basis of certain economic motivations, the key to understanding the resultant relations is to be found in the economic structure of each society. [...] We must in any case take it as our starting point that it is the class structure that creates the colonial system and rules over it, and not the opposite. (ibid.: 153, 155) The theory of the world capitalist system eschews concrete analysis, so that the conclusions it comes to on the periphery have very little connection with what actually happens there. But Frank's philosophical background, too, is unrelated to Marxism, as Cordova argues: The concept that Frank has of history is nothing other than the result that emerges, with the passage of time, from the determinate inflii ence exercised by the system of colonial relations, which is presented in the form of an idea (in the Hegelian sense) on the social whole. The economic structure as well as the technical, political, legal and ideological structure, is presented as the reflection of this idea at the different levels of social life. (ibid.: 165) The critique of Carddso (in Sonntag 1974), by contrast, typically targets the theories focusing on the narrowness of the market at the periphery. He notes thai the development of capitalism is not linked In Sf-i 'Metropolis-Periphery ' Theories of Imperial ism 51 the firs' instance to expansion of the market for consumer goods, and jo ro the size of wages, but primarily to the expansion of productive nsumption of capital, and that in any case the problem of the market is not posed as a problem sui generis, unrelated to capitalist develop- ment itself. 1 ** And he concludes that 'behind the apparent logic of such a n interpretation there hide mistakes which have to do with the nature h f the capitalist production process' (Cardoso ibid.: 53). Examining the case of Brazil, he in fact argues against the thesis of ,e (inevitable) extraversion of the peripheral countries: 'All the data have so far cited has been aimed at showing that today's economic pansion is not attributable to exports but to growing domestic and. Brazil appears as anything but a sub-imperialist country' (ibid.: 1). Cardoso effectively refutes the thesis that a strong local bourgeois is not constituted at the periphery, with all important decisions being made by imperialistic capital. He argues that 'to assert that capitalist accumulation truly takes place and at the same time to deny the signifi- cance of the bourgeoisie is a characteristic contradiction' (ibid.: 45). His conclusion is as follows: All the theoretical and analytical endeavours to demonstrate the specific, and new, element in present-day forms of dependence have rapidly disintegrated, leaving vague turns of phrase embroider- ing deceptive basic principles: the development of underdevelop- ment, sub- imperial ism, the lumpen bourgeoisie, revolution at the periphery, etc. (ibid.: 37) In another work of Cardoso there is questioning of the thesis that the development of the metropolis is based on plunder of the periphery. The idea that the development of capitalism depends on the exploita- tion of the Third World should be scrutinized more carefully. In reality, the basic tendencies in recent years indicate that Latin America's share of tile expanding international trade, and of investments [...] the relations between the developed capitalist countries and the dependent nations 'ead rather to a marginalization of the latter within the global system of ■nomic development' (Cardoso 1974: 217). 2-1 1 Epilogue We shall present a more comprehensive critique of metropolis— l^riphery theories in the next chapters. Of course the interventions 52 Rethinking Imperialism: A Study of Capitalist Rule we have introduced here, of Cordova and of Cardoso (which although they are to be included in the metro pot is- periphery current, revise basic assumptions of the 'Monthly Review School'), and Bettelheim's interven- tion on the theory of unequal exchange, do in themselves represent a preliminary, and partial, critique. The theoreticians of dependency continue to reproduce their argu- ments in theoretical discussion, indeed with a considerable number of followers, with one basic difference: the discussion on dependency has retreated backstage and emphasis is now placed on investigating the his- torical development of the 'global system' (see, for example, Wallerstem 1998; Frank and Gills 1996; Modelski 1987; Arrighi 1996, Amin 1989). Certainly one reason for this displacement is the radical change in the theoretical and political conjuncture (the fashion of globalization). We nevertheless believe that the most important factor is historical and empirical refutation of all the dependence arguments utilized in the 60s and 70s (for more on this see Part II and 111, Willoughby 1986, Howard and King 2000). Dependency theorists also fail in their effort to explain contempo- rary developments in capitalism. For example, Wallerstem (1998, 199 c ') argues that capitalism is no longer tenable as a system. He believes that the capitalist economy is trapped in a fatal contradiction. While sover- eign states provide the basis for every capital accumulation, for the first time in 500 years they are on a downward slide in terms of their inner and outer sovereignty: This is the primary sign of the acute crisis of capitalism as an historical system' (Wallerstein 1999: 33). Arrighi (199b, 1999), by contrast, sees the modem neoliberal organization of capital- ism as a subversion of the hegemonic position of the USA, in a similar cyclical pattern to that experienced in the past by Genoa, Holland and Britain. Faced with a setback in commodity markets, with profit oppor- tunities for its capitals beginning to decline, a hegemonic power switches to financialization: financial capital flows elsewhere in search of profits. Any comprehensive critique of the above argumentation must start from a specific nodal point: critique of the hypothesis that global capitalism functions as a uniform class structure or, at any rate, that tla* international processes and relationships have priority over processes and social-class relationships inside each social formation, and indeed determine the latter's evolution. One crucial issue in this context is the theory of the state. Can, in the context of the 'global economy', the state be regarded as an instrument in the hands of international corporations or monopolies, or is it a condensation of the class power of a (national) capitalist ruling class associated with other coterminous capitalist ruling ^ 'Metropolis-Periphery' Vieories of Imperialism 53 jjsses (and, respectively, capitalist states) through relations on the one hand of class solidarity and on the other of economic, political or other ,i c ij]iurar, 'ethnic' etc.) competitiveness? More precisely, can capitalist states in the so-called Third World be regarded as an appurtenance or accessory of the developed capitalist states? These theoretical problems ^(11 be tackled in Parts II and tit. ^ Alternatives to Classical and Centre-Periphery Approaches 55 Theories of Imperialism as Alternatives to Classical and Centre-Periphery Approaches 3.1 Introduction: In search of a non-reductionist analytical framework In Chapter 2 we found that the centre-periphery problematic and tlie relevant discussion conducted after the Second World War was in reality largely based on arguments from the classical theories of imperialism. Some of the basic findings from this discussion might be summarized as follows: (1) Development of the productive forces leads to monopoly produc- tion structures {concentration and centralization). This process cre- ates surplus capital. (2) Production is internationalized. Individual 'national' capitals develop on a geographical terrain that greatly transcends national borders. Capitalism becomes a global system; that is to say the 'laws' of the system now operate on a world scale. (3) The state in developed capitalist countries provides geopolitical support through (colonial) imperialism for movement of capital. In reality it becomes merged with the monopolies. The world is divided into spheres of influence. Competition between individual 'national' capitals takes the form of geopolitical competition between the powerful states. The state in the 'dependent' countries becomes a tool in the hands of imperialism and the monopolies. 1 It is worth noting that from the very outset there have been endeav- ours to mount a critique of the economic reductionist conception imposed by point (3). Indicative in this connection have been the interventions by Weber and Schumpeter who, however, as we shall 54 -stablish below, subsequently converge in their theoretical problem- atic Apart from other similarities, they also put forward a different conception of the state, which ceases to be conceived of as an inert instrument in the hands of individual monopoly capitals, acquiring its wn autonomous dynamic. There are a number of other contemporary analyses that speak of a ne w imperialism and whose stance on the same point (3) is critical. Some f them accept point ( 1 ). Others do not. The basic point of convergence Is acceptance of (2), a view that enables individual capitals to distance themselves from the national space without losing their national 'iden- tity'. Individual capitals with different national origins compete in the international sphere. Following the end of colonialism the powerful states, then, seem to have been confronted with the problem of solving a very difficult 'equation': how is it possible to safeguard the outflow of their individual capitals that are being invested in places outside the range of their political influence? Everything, therefore, starts from the fact that 'impe- rialist capital' is traversing a politically fragmented world. The 'new Imperialism' (in many variants depending on the author) is the solution to this difficult equation, expressing the political aspect of a basically economic relationship. It is the political solution for the consolidation of economic hegemony. We do not propose to embark upon further elaboration of questions that will be discussed below. Let us merely note that the attempt to achieve differentiation from the economic reductionism of point (3) often occurs without specific reference either to the structure of the state or to the mode of organization of class domination within capitalist social for- mations (or, even worse, sometimes the discussion implicitly accepts the mainstream argumentation on 'modem' sovereignty). It seems, finally, that the key absentee from the discussion, again, was Marx. 3-2 The 'political' approach to imperialism: Some notes °n a long theoretical tradition 3-2.1 Introduction: Imperialism as an 'autonomous' P°Hcy of the State *s aptly noted by Callinicos (2007), both Weberian historical sociolo- S ls ts, such as Anthony Giddens, Michael Mann and Theda Skocpol (see et °w), and international relations theorists in one or the other realist Edition have criticized classical Marxist analyses for their failure to 1 rceive that the kind of competition specific to inter-state systems is ^ore or less transhistorical phenomenon governed by a logic irreducible 56 Rethinking Imperialism: A Study of Capitalist Rule Alternatives to Classical and Centoe-PeriplKry Approacites 5 7 to that of class exploitation. The problematic in question takes us back a very long way, even before the time of Max Weber. In what follows we shall focus on some moments (or aspects) of this - unquestionably non-homogeneous - theoretical tradition. It is worth noting that reductionist-type biological (and not economic) theories of imperialism were formulated well before the turn of the twen- tieth century. It is then that we encounter a number of extreme racist approaches, chiefly in England (in the works of Benjamin Kidd and Karl Pearson) and Germany (in the works of Friedrich Naumann, Friedrich von Bernhardi and Houston Stewart Chamberlain). Influenced by the logic of social Darwinism, these analyses did not seek out the origins of imperialism in the economic sphere. On the contrary, they judged that since the white race is 'superior' to the other, coloured races, its destiny and duty is to exercise dominion over them. Imperialism is portrayed in essence as a purely biological (in the racial sense) phenomenon: it has to do with the struggle for the survival of the most powerful 'race'. 2 Among the first writers to incorporate systematically into their analy- sis a purely political definition of imperialism was the Austrian theoreti- cian, Heinrich Fried jung. According to his argumentation, imperialism should be regarded as a phenomenon of power politics in which the state is the decisive agent of history.* What we see formulated, in other words, is an intetlectital orientation that much later came to be associated primarily with the so-called realist approach. This is in reality a suitably theorized systematization of views that were widespread in public debate. Many theoreticians and politicians of the time were in the habit of viewing the imperialistic expansion of the great European powers as an ineluctable political process: the world ol the future would be dominated by great empires, and any nation-state which did not join their ranks was condemned to an inferior status. -1 In a speech in 1897, Chamberlain, for example, reaffirmed the above asser- tion in the most unambiguous way: 'it seems to me that the tendency of the time is to throw all power into the hands of the greater empires, and the minor kingdoms - those which are non- progressive - seem to be destined to fall into a secondary and subordinate place' (quoted in Mommsen 1982: 6). 3.2.2 Imperialism as the fusion between independent political and economic factors: Brief comments on Weber's argumentation In a general sense Weber's analysis moved within the parameters of the abovementioned current. In late nineteenth century Germany, with . e exception of the circles of revolutionary Marxism, the 'bourgeois' te lligentsia did not make any particular effort to analyse the phenom- a on of imperialism (Mommsen 1982, Koebner 1949). It was after 1880 that the idea of a German colonial empire began to a cqu' re momentum among the intelligentsia. All of bourgeois science rose to the occasion in response to the invitation to establish a dynamic German Weltpolitik. Weber was one of the important supporters of this neV t- ideological line. In a lecture at the University of Freiburg in 1895 jje said categorically; Also crucial for our development is the question of how long-range policy can highlight the significance of great issues of political power. We must become aware that the unification of Germany was a youthful folly pursued by the nation in its maturity and that it would have been better for it to have been avoided, taking into considera- tion how much it has cost us, if it is destined to be the culmination and not the point of departure for German policies of power on the global level. (quoted in Mommsen 1977: 128) According to Weber, state political structures are characterized by a specific internal logic that is linked to expansion and war, and is in no way to be reduced to economic interests. The emphasis here is placed on the prestige aspect that induced the great powers to engage in over- seas expansion. What is involved is an unavoidable 'dynamic of power', which evidently underlies the immanent expansionist 'behaviour' of the powerful capitalist states: riot The power of political structures has a specific internal dynamic. On the basis of this power, the members may pretend to a special 'pres- tige', and their pretensions may influence the external conduct of the power structures. [...] The prestige of power means in practice the glory of power over other communities; [...] The Great Powers are very often expansive powers. Yet, Great Powers are not necessarily and not always oriented towards expansion. Their attitude in this respect often changes, and in these changes economic factors play a weighty part. (Weber 1978: 911-12, emphasis added) Weber seeks to emphasize the fact that it is not enough in itself to tte the autonomous expansionist logic of the state if one is to account 0r a H of the factors that give rise to Imperialism. Specific structures at 58 Rethinking Imperial ism: A Study of Capitalist Rule the economic level co-determine the extent and the manner of political expansion. Concerning the economic motives of imperialism, Weber's line of thought could also be summarized as follows: the predominantly sociological motive for imperial expansion 'was especially likely to appeal to ruling elites', and this 'was usually associated with specifically economic interests, particularly those of groups which sought monop- oly profits instead of being content to manufacture and exchange goods in a formally free market. Monopolistic concessions of all kinds were especially likely to occur in the context of imperialist policy, and con- sequently financial groups and enterprises who were interested in this type of opportunity - among whom armament manufacturers were not the least important - could be relied on to support imperialist expan- sion' (Mommsen 1982: 19-20). Imperialism is the product of a concres- cence of political and economic factors in a single current. It is also noted by Weber at a number of points that imperialism entirely corresponds to the interests of the ruling elites given that the expansion of the boundaries of state jurisdiction typically entails an augmentation of their social prestige, making a decisive contribution to consolidating their rule over the subjected classes. 5 Weber concludes his argument with the observation that liberal competitive capitalism can curb the expansionist drive of the state, to a significant extent limiting the phenomenon of imperialism. In this way he introduces a fundamental distinction which - as we shall see below in the resultant theoretical debate - was to win many later followers. The imperialist 'predatory' form of capitalism, mainly asso- ciated with monopolistic economic interests, is nothing more than a deviation from free trade, privately oriented capitalism. Pursuing a different line of argument, Weber appears to some extent to share the conclusions of the classical theories of imperialism: he accepts the notion of a partial connection between imperialism and the monopolistic organization of the economy, at the same time consid- ering, however, that the potential for reversion to a peaceful liberal capitalism should by no means be excluded. The 'pure' normal form of capitalism, considered as an economic system based on the produc- tion and rational exchange of goods within a market framework, is an impediment to the manifestation of autonomous state expansionism and thus is not necessarily to be linked to the phenomenon of imperialism (Weber 1978:913-21). To recapitulate: Weber regards imperialism as a permanent potential within capitalism, associated with a specific expansionist dynamic of the capital^ 1 state as well as with economic domination by monopoly interests. .4 Itematives to Classical and Cet\be-Periplwry Appwacltes 5 9 a 2.3 The vacillations of Kautsky and his flirtation ^ith Weberian logic f he previously mentioned key distinction between normal free-market ipitalism and the predatory monopolistic form of capitalism based on iperialist expansion into overseas territories brings to mind the work { a German Marxist of the same period: Karl Kautsky. As is well known, Kautsky was the most distinguished Marxist peoretician of the German Social Democracy after the death of Marx id Engels. He contributed to the spread of Marxist ideas through )pularization of many of the texts of the latter, from 1883 onwards Ilting the theoretical journal of Social Democracy, Die Neue Zeit. Arguably, it was he more than anyone else who determined the party's >]itical orientation. On the question that interests us it should be fbted that he was probably the first Marxist theoretician to pay seri- ts attention to the phenomenon of imperialism (through a series of tides beginning around 1884), without his work as a whole reflect- any coherent relevant theory. Kautsky's ideas on imperialism •re fruitful but profoundly contradictory, containing 'the germ of rery significant view expressed by anti-revisionists before 1914, as ;ll as anticipating the non-Marxist model of imperialism advanced Joseph Schumpeter' (Howard and King 1989: 92). In fact, certain loments of his work argue for a conception of imperialism that loves within the parameters of the more generally institutionalist leoretical strategy pioneered by Weber which to a great extent - as re shall see below - presented ideas that later reappeared in the work Schumpeter, 1 ' We shall subsequently endeavour to pinpoint these loments in Kautsky's thought (without, however, referring to his Itervention in its entirety). In his early texts Kautsky adopted the underconsumptionist view- )int considering that the Great Powers' expansion into their overseas llonies was a policy that satisfied the economic interests of the bour- )isie as a whole. His analysis in The Class Struggle, published in 1892, indicative. It was in this work that he undertook to explain (for an lternational audience) the Sozialdemokratische Partei Deutschlands 's JPD's) Erfurt Programme. Kautsky thought that the territorial expan- ton of the developed industrial states was basically a race to secure larkets, which, because of underconsumption by the masses, were Jecessary for capitalist development. Notwithstanding the possibility channelling the surplus commodities as exports into international larkets, 'the domestic market is the safest for the capitalist class of rery country, [...J it is the easiest to maintain and to exploit' (Kautsky 60 Ri-tltitikiitx Imperialism: A Study of Capitalist Rule 1892, iv: 3). The political expansion of the state in the context f expanding internal markets through the widening of borders is thus j n ttie economic interest of the bourgeoisie as a whole: 'in proportion as the capitalist system develops, so also grows the pressure on the pa r j of the capitalist class in every nation for an extension of its political boundaries' (ibid.). It is precisely from here that there emerges that political competition for colonies which contributes to militarism and gradually turns Europe into an armed camp. According to Kautsky, there are two possible outcomes: The colonial policy of these states affords inadequate relief to the need of expansion caused by their capitalist system of production. [...] There are but two ways out of this intolerable state of things: either a gigantic war that shall destroy some of the existing European states, or the union of them all in a federation. (Kautsky 1892, iv: 3, emphasis added) In his exposition Kautsky largely enlists arguments that a decade later constituted the core of Hobson's analysis, and also the analysis of numerous Marxists. Imperialism is a politicul phenomenon whose founda- tions are unequivocally economic. The contradictions between the great imperialist powers will either lead to an outbreak of war and violence or will be settled peacefully. We thus see that Kautsky had quite early arrived at the idea of ultra-imperialism, to which he was to return - with modified argumentation - some years later. We do not propose to elaborate on every twist and turn in Kautsky's thought on the subject of imperialism. 7 Suffice it to say that shortly before the turn of the century, in 1897-8, Kautsky appears to have flirted with the notion that 'pure' industrial capitalism has no need of imperialism for its reproduction. Consequently, it is the pre-industrial structures that are responsible for the explosion of imperialist con- tradictions. 8 The argumentation is unmistakably present in the long article titled 'Colonial policy old and new' (1898). Let us pause briefly to consider it. Kautsky is now clearly performing an about-face in relation to hi s previous views. The colonialism of the seventeenth and eighteenth centuries can in no way be regarded as the outcome of industrial capitalism. The colonies served the interests of the 'pre-industrial' classes of traders and bankers and no one else. Industrial capitalist had no interest in them because industrial capital needed purchasers of commodities, something which could naturally not be provided Alternatives to Classical and Centw-Peripliery Approaches 6 1 colonies. The commercial and financial fractions of capital were trtliereiitly monopolistic and militaristic. By contrast, industrial capi- ' | sought peace and unimpeded free trade. It was thus intrinsicully ^.imperialistic: 'the more industrial capital, and particularly produc- . , n for export, advances into the foreground, the greater the capitalist nations* need for peace' (Kautsky 1898: 804-5). But how in the context of the above logic could one interpret the intensity of colonization at the end of the nineteenth century and the re turn both to formal fonns of domination and to protectionist prac- tices? According to Kautsky these processes were the effects of political reinforcement of pre-industrial reactionary social forces (merchants, fin- anciers, state bureaucrats) whose interests in no way favoured capitalist economic development: [!|t was not the needs of industrial development that brought on the latest phase of colonial policy, but, on the one hand, the needs of classes whose interests are opposed to the requirements of economic development and, on the other hand, the needs of states whose interests are opposed to those of advanced civilization. In other words, the most recent phase of colonial policy is, like protectionism, a work of reaction; it is by no means necessary for economic development, often even harmful. It originates, not in England, but in France, Germany and Russia. (Kautsky 1898: 806, emphasis added) This argumentation of Kautsky seems to have constituted something of a deviation from the mainstream logic of his work. Four years later Hi the pamphlet titled Commercial Policy and Social Democracy he reverts to his familiar viewpoint (imperialism as a battle for foreign markets in a situation of overproduction), largely foreshadowing the later analyses ** Lenin and Hilferding 'by pointing to the connection between the formation of cartels, industrial capitalists' demands for protection, and * growth of militarism which threatened to spark off a world war' 'Howard and King 1989: 94). °ut the 1898 problematic did not entirely disappear from Kautsky 's ™ (iking and this may be useful when it comes to venturing an inter- nal ion of the argument on ultra-imperialism. In 1914 Kautsky main- ln ed that although developed capitalism has a need for colonies, it is ' serially peaceful in nature. Not free trade but the multiplicity of the ^structive consequences of war impels the great powers into a 'holy «nce'. They had the capacity to collaborate in the exploitation of I 62 Reiliiitking Imperialism: A Study of Capitalist Rule the world without powerful conflicts manifesting themselves between them, on condition that they divide up the economic space in accord- ance with the balance of (international) forces." According to this logic, it would be possible to attribute the outbreak of the First World War to the transitory political ascendancy of the abovementioned 'pre-indus- trial' and predominantly militaristic social forces. 10 3.2.4 Imperialism as the outcome of the survival of pre-industrial political structures in Schumpeter's analysis As we saw above, Weber's general conception of imperialism involves two basic theses. First, imperialism reflects the immanent expansionist logic of the capitalist state. It can simultaneously serve the economic interests of the commercial and monopolistic segments of capital while contributing In parallel to reproduction of their political predominance within their respective social formations. Second, pure liberal capitalism has no need of imperialist expansion for its reproduction. Indeed for precisely that reason, it is opposed to, and is ultimately capable of curb- ing, the expansionist dynamic of the state. Consequently, imperialism is basically a political phenomenon, even when it succeeds in co-opting the ambitions of the monopolistic economic elites (to the extent that they exist). This current of thought - not of course with all its wealth of elaboration - is embodied in the argumentation of Schum peter. On the issue of imperialism Schumpeter was the first theoretician to clearly differentiate himself from Hilferding and all other Marxist approaches that conceived of imperialism as an indispensable trend of the 'latest phase' of capitalism. He at once limited the field of discussion by defining imperialism as the 'objectless disposition of a state toward unlimited and violent expansion' (Schumpeter 1951: 6). Schumpeter considered imperialism to be an obsolete policy and regime, that is, an absolutist remnant, which was bound to fade away with the devel- opment of modern capitalism. Indeed, he regarded imperialism as an 'old' inheritance from pre-modern capitalist eras, which was going to disappear; in contrast to Hilferding, who regarded imperialism as a 'new', inherent characteristic of capitalism in its 'latest', monopolistic stage: 'a purely capitalist world [...] can offer no fertile soil to imperial- ist impulses. That does not mean that it cannot maintain an interest in imperialist impulses' (ibid.: 69). Schumpeter not only regarded expansion and war as a possible out- come of intra-state (imperialist) rivalries but also identified the variety of forces that are opposed to militarism and war. He claimed that the A Itemativex to Classical and Centre-l'eripl tery Approaclies 63 ialist perspective could be comprehended as an attempt to find a ^lotion to the problem of imperialism. Schumpeter (ibid.: 296-7) gave Hilferding credit for coming to grips with such problems, but believed that factors impeding Imperialistic policies are not lacking in capitalist cociety- Liberal capitalism was 'by nature a nti -imperialist', so 'we cannot readily derive from it such imperialist tendencies as actually exist, but fnust evidently see them only as alien elements, carried into the world f capital ,sm from the outside, supported by non-capitalist factors in modem life' (ibid.: 96). Imperialism should thus not be described as a necessary phase of capitalism, but as a transitional phenomenon pending foe final triumph of capitalism. He finally remarked, however, that many elements (for example, tariffs, cartels, trusts, monopolies), which were analysed as a part of the 'economic' framework of imperialism, were political and, possibly, pre- capitalist in origin (ibid.: 295). Schumpeter wrote further: It was neo-Marxist doctrine that first tellingly described this causal connection (Bauer) and fully recognized the significance of the 'functional change in protectionism' (Hilferding) [...); Thus we have here, within a social group that carries great political weight, a strong undeniable, economic interest in such things as protective tariffs, cartels, monopoly prices, forced exports (dumping), an aggressive economic policy, an aggressive foreign policy generally, and war, Including wars of expansion with typically imperialist character. (ibid.: 79, 83-4) Schumpeter regarded that monopolistic structures and protectionist policies had deeper political and social causes. 11 Schumpeter wrote his essay on imperialism (1919) when historical events (World War 1) seemed to have verified the hypothesis of Marxist authors (for example, Hilferding, Bukharin and Lenin) that modern Ca Pitalism included imperialism as one of its indispensable features. Therefore, his approach may be regarded as a critique of this hypoth- ts| s (Taylor 1951: 546). Sweezy claimed that Schumpeter's essay on 'imperialism was a corrective supplement to his own Theory of Economic Dev elopment, repairing his omission of any explanation of 'imperialism' Schumpeter 1951, preface by Sweezy). m one sense this analysis of Schumpeter is a powerful interpretation f imperialism from within the parameters of liberal economic thought. " e 'invisible hand' (Smith), in international markets transformed into ^ theory of comparative advantage (Ricardo), has difficulty reconciling 64 He thinking Imperialism: A Study of Capitalist Rule A Itenia fives to Classica I aiul Cei ltw-Petipiwry Approaclies 6 S imperialism - the logic of state expansionism - with the 'normal' func- tioning of capitalism. If we accept Smith's basic thesis, that if left f ree from artificial interference natural economic forces will prove strongs than any political or legal 'obstacles' (Rubin 1989), then imperialism can be understood as an exception to the rule, attributable to political structures that do not accord with the real nature of capitalism. Uter neoclassical approaches share the same viewpoint. According to neoclas- sical economists 'the use of force brings deadweight losses - net costs for which there are no corresponding net benefits. Consequently, rational decision makers will recognize the superiority of contract as a means of acquisition because all parties may benefit more through voluntary exchange than through violent conflict. Thus, while the reality of impe- rialism has rarely been denied, it has been widely thought to be outside the boundaries of orthodox economic analysis, which limits itself to the logic of the rationally acquisitive action' (Howard and King 2000: 19). 3.2.5 Theories of imperialism as 'political discontinuity': A general assessment The abovementioned tradition of thought obviously did not stop with Schumpeter. It was disseminated via a whole range of later analyses and to a certain extent has currency even to our day. It is a view which testifies to great confidence in the democratic and peace-loving char- acter of liberal capitalism. It receives theoretical inputs from the liberal tradition of free trade, emphasizing the internationalist character of the present-day capitalist system. It 'over-politicizes' the phenomenon of imperial ism, attributing the imperialist aggressiveness of capitalism (where it exists or has appeared) more to traditionalist remnants within industrial societies or to phenomena not compatible with the 'normal' structure of the capitalist system as such. One indicative example is a memorable intervention by Arendt (1951). Placing particular emphasis on the link between fascist and imperialist ideology, she maintained that racist ideologies of imperial- ism and the anti-liberal structures of imperialistic politics sooner or later lead to fascism. Indeed she reached the same conclusion as Schumpeter: in the final analysis imperialism is the effect of residual elements of p re-democratic social structures that have survived in modern industrial societies. Therefore, pure liberal capitalism has no need of imperialism for its reproduction. Schumpeter's argumentation was taken over in its entirety W Winslow (1931, 1972) who, distancing himself both from classical Marxist viewpoints and from Hobson's analysis, extols the analysis pt' 1 ard by the former: 'one of the most ambitious and noteworthy empts to give an entirely new and positive orientation to the theory imperialism without completely abandoning the economic interpre- 0oi\ is found in Professor Joseph Schumpeter's "sociological" theory irnperialism'(Winslow 1931: 749). In the same line of argumentation, conceived imperialism as an outcome of 'pre-capitalist' structures, thus believed that 'a purely capitalistic world could never give rise the imperialistic impulse' and that 'imperialism had its beginning ore, not after, the industrial revolution' (ibid.: 751). Therefore, the intent of imperialism is political and not economic. Economic compe- tion is peaceful and 'co-operative'. Political rivalry, by contrast, takes e form of nationalism, imperialism and militarism. Imperialism is a enomenon that tends to disappear to the extent that, with the devel- meut of capitalism, pre-industrial political institutions are replaced, is in the nature of capitalism not to generate phenomena such as perialism (Winslow 1931, 1972). Similar views are to be found in the more comprehensive exposition by istow (1960), who undertook to present a theoretical proposal on his- rical development that could be an alternative to Marxism (or at least Marxism as he himself had understood it). On the question of imperi- m the writer accepts that in all their developmental stages, industrial eties have sought to satisfy their economic interests through estab- ment of overseas territories. Nevertheless, and contrary to the views the classical theorists of imperialism, imperialist expansion is of slight ificance for the development of modern industrial societies. The iter have no need of imperialism for their reproduction. 12 Of course it ly frequently be the case, according to Rostow, that the great differ- ces between countries in levels of economic development, which in can often be reflected as significant differences in military potential, give rise to aggressive imperialistic policies (of a regional or global hire). However, for one more time, imperialist expansion is in his view *>y no means peculiar to industrial capitalism, but is generally due to non- Konomic and, especially, political factors (Mommsen 1982: 84). We do not propose here to go into great detail concerning every aspect f a problematic whose origins are in the theoretical interventions of Weber and Schumpeter. Undoubtedly, the ultimate inheritors of the Bbovementioned reflections are today's representatives of the school of Wpiitical realism. According to this line of thought, imperialist expansion- jffem and inter-state antagonisms are not reducible (or not exclusively JMucible) to the economic sphere but reflect (or mainly reflect) the logic * suites acting as states (Howard and King 200O: 30), that is representing 66 Rethinking Imperialism: A Study of Capitalist Rule an internal expansionist dynamic as such, or better, an internal logic or power. As has been widely commented in the relevant literature, this is a view that has gained wide acceptance in the works of well-known historical sociologists who have been influenced by Weber, for example Giddens (1981, 1987), Mann (1986, 1988) and Skocpol (1979). The argumentation of this paragraph would be incomplete without a mention of the deeper similarity that exists between the theoretical moments examined above and classical Marxist analyses. Although the former have often emerged in the course of attempted criticism of t| le latter, in reality they achieve nothing more than rearrangement of an argumentation that always unfolds within the same wider problematic. Let us pause for a little to reflect on the preceding assertion. As can be easily observed, there is a notable convergence towards the view that imperialism corresponds to forms of capitalism that are different from its liberal variant. In the analyses of classical Marxism, imperialism was linked to monopoly capitalism as a new stage in societies' economic development. In analyses following the Weber-Schumpeter logic, on the other hand, imperialism was interpreted as the result of politico- economic structures (pre-indu stria! or otherwise) that were in any case entirely unrelated to the deeper logic of liberal industrial capitalism. In the Lenin-Hilferding analyses, liberal (and more or less peace-loving) capitalism was represented as something inevocably past, while in the texts of Schumpeter it was portrayed as an ineluctable future (sooner or later the monopoly structures would be eliminated as the capitalist system became more democratic and liberal). But in all instances the phenomenon of imperialism retained structural discontinuities which in extreme cases could be 'guaranteed' up until the time of their disappear- ance (a contingency in no way excluded even by Weber). Even though we propose in Part II to conduct a detailed examination of the constitution of power relations within a social formation, we should note that the above perspectives deviate significantly from the way in which Marx himself regarded the social totality, that is to say the complex structural and decentralized coexistence of the economic, political and ideological levels. Both in classical Marxist analysts atui in analyses along the lines of the Weber-Schumpeter intervention, the coexistence of the three social levels is synchronic, in the sense that the evolution of one plane directly reflects the development of the others. This is the well-known essentialist schema according to which all th L ' social moments are organized in a framework of the deeper unity which they can also express at any moment (a Hegelian conception of social whole, for more details see Part II and Althusser and Balibar 1997). Alternatives to Classical and Centie-Peripttery Approaciies 67 ]„ the economists analyses of classical Marxism everything starts ^m the transformations on the economic plane. Subsequently, the entire politico-ideological organization of the capitalist states (the superstructure') - always contemporaneous with these transforma- tions - ada P ts to them. Imperialism is thus a stage, reducible to *e movement of maturation of the productive forces and reflecting t j ie mode of existence of monopoly capitalism. On the other hand, the VVeber-Schum peter approach does not in any way constitute a refuta- tion of the aforementioned (Hegelian) conception of the social whole. It simply posits a different way of organizing the contemporaneous coexist- ence of the different social planes. The entire critique amounts to a simple reversal of causality, which now passes from the level of the economy to that of politics. In Schumpeter's conception monopoly capitalism was nothing more than a 'departure from the pure liberal form of capitalism, which was possible because the capitalist class, influenced by survivals of pre-industrial social structures of an aristocratic type, was corrupted into monopolistic practices' (Mommsen 1982: 26). Here the economic movement reflects the pace of the political. As long as pre-industrial or pre-capitalist (aristocratic) structures prevail or are reproduced in the latter, social organization will systematically deviate from the pure liberal form of capitalism, and imperialism will be the inevitable consequence. What Schumpeter ultimately achieves is to counterpose to the economism of the Marxist classics a naive and simplistic historicism, without modifying in any way his general manner of apprehending society. Imperialism is always a manifestation of the contemporaneous coexistence of the different social planes, externalising their essential inner unity. History is thus portrayed as a succession of 'essences' an d the corresponding forms of expression that are assigned to them. ^respective of whether it is to be dated prior to or subsequent to the Uberal 'pure' capitalism, imperialism is nothing more than a developmen- M stage. It expresses either the 'end' of capitalist history or one phase before the 'end'. ** 3 Setting the base of recent discussions on Capitalist imperialism: The kernel of the ^humpeterian-Weberian approach A. . * already mentioned, Schumpeter (and, in his way, Weber) shaped hat we might call the 'liberal' approach to imperialism. But there Unfortunately still an element in their analyses that has passed 68 Rethinking imperialism: A Study of Capitalist Rule unnoticed in contemporary discussions: the non-economic-reductionist theoretical agenda. Many recent heterodox and Marxist works construct their argumentation around this broader Weberian problematic. Let us for now attempt to follow Schumpeter's argument. His basic aim was evidently to criticize the dominant classical analyses of imperi- alism (above all Hiiferding's and Lenin's). To accomplish such a task l, e introduced an argument comprising two distinct moments. On the one hand he firmly believed that capitalism was 'by nature anti-imperialist' in the sense that in a purely capitalist world impe- rialism is an irrational process. Capitalism 'can offer no fertile soil to imperialist impulses' (Schumpeter 1951: 73, 69). On the other hand imperialism pertains to the conduct of the state, perceived as an end in itielf. 'expansion for its own sake' (ibid.: 6), Imperialist state policy is thus perceived as otiose, if regarded from a purely capitalist standpoint. Schumpeter believed that he was living in a transitional phase of capi- talism, which was the unique outcome of the coexistence of 'two differ- ent epochs': capitalism and absolutism. Present-day capitalism existed alongside feudal remnants (wittt the bourgeoisie partially subject to the power of imperialist autocracy). 13 This transitional social regime could be given the name of imperialist capitalism to differentiate it from anti-imperialist pure capitalism, a theo- retical construct designating a hypothetical gradual counted rend extrap- olated into the future (ibid.: 98). Imperialist capitalism in Schumpeter's conception is the temporary outcome of the fitsion between two distinct 'logics of competition': the inter-state "political' competition of abso- lutism (objectless state expansion) and the inter-enterprise 'economic' competition of capitalism (free trade). Schumpeter's argumentation is of course more complex than what might be suggested from this sche- matic summary. He analyses not only the peculiar historical form taker) by the inter-connection between these two different forms of competi- tion but also the way they change over time. We are thus confronted with two different logics of competition, an economic and a political one. Economic competition and politics 1 competition operate at different levels, which must not be confused According to Schumpeter, confusion of the two levels (economic reduc- tionism) is the key mistake of Marxist theories. Imperialist capitalisi" can take different forms depending on the proportions of the mi* between 'absolutist' political rivalries on the one hand and capitalist competition on the other. Capitalism and autocratic territorialism as defined by Schumpeter d not operate in isolation from one another. Imperialist capitalism is Alternatives to Classical and Centre-Periplury Appmadies 69 fad, DUt a ' so represents a significant deviation from what is implicit the logic of both capitalism and territorialism in the abstract. This l)lematic allows the formulation of many contemporary approaches tfhi cn stress l he 'tension' between the political and the economic 'logics' of capitalism. por example, all that would be needed would be a slight shift in the jcfiumpeterian way of thinking - such as that formerly proposed by l^we (1926) - in order to arrive at the argument that imperialism is a constant and not a temporary attribute of capitalism. Capitalism would now represent a permanent fusion between the two abovementioned log- ics of competition, with inter-state political competition (the territorialist logic) being not a feudal remnant but a rather stable way of organizing political space under capitalism as well. The capitalist state would, to use the well-known formulation proposed by Giddens (1987), approximate the Weberian conception of the 'container' of its own autonomous power (and so, as indicated, of its own 'expansive dynamic'). Following the same line of argumentation, Arrighi (1996: 32-4) remarked that under capitalism the historical connection between the two different 'logics' of competition can lead to two opposite 'modes of rule or logics of power'. In his analysis: Territorialist rulers identify power with the extent and populousness of their domains, and conceive of wealth/capita! as a means or a by-product of the pursuit of territorial expansion. Capitalist rulers, in contrast, identify power with the extent of their command over scarce resources and consider territorial acquisitions as a means and a by-product of the accumulation of capital. Paraphrasing Marx's general formula of capitalist production (MCM '), we may render the difference between the two logics of power by the formulas TMT' and MTM', respectively. According to the first formula, abstract eco- nomic command or money (M) is a means or intennediate link in a process aimed at the acquisition of additional territories (T minus T = +AT). According to the second formula, territory (T) is a means or an intermediate link in a process aimed at the acquisition of addi- tional means of payment (M* minus M = +AM). (ibid.: 33) ™e quote the above passage because we believe that it embraces a ueoretical speculation more or less characteristic of the relevant con- e mporary literature. Apart from the authors already discussed, Wood "05), for example, tends rather to agree with Arrighi, arguing, 70 Rethinking imperialism: A Study of Capitalist Rule however, that the abovementioned formulations apply more properly to pre-capitalist empire building (a view approximating Schumpeter's). In the following sections we propose to examine some modern analyses that share the same general theoretical assumptions. Befo re embarking on this examination, here are two points of criticism to be made in relation to this quasi-Schumpeterian or quasi-Weberian problematic. It must be admitted that there are several different ways of conceiv- ing the 'inner logics' or social natures of a capitalist society, whether at the economic or at the political level. In our view the recent literature fails to elaborate a consistent theory of the state. The whole discussion appears to be trapped in a pseudodi lemma between on the one hand viewing the state as a thing or an instrument and on the other conceiving of it as an autonomous Subject.'* In the immediately following section we shall concern ourselves with some rather representative moments of these conceptions, contrasting them with the Marxian approach to the State. In Part II of this book we will have the opportunity to outline a Marxist conception of the state, according to which, unlike in the instrumentalist conception, class contradictions are not taken as being external to the state. But, by the same token, in contrast to the concep- tion of state as a subject, in the view that we propose to outline, the contradictions within the state cease to be external to class struggle. In other words, We must not think the relationship between the economic and the political levels as a relationship of externality, with the state appearing as an autonomous entity to be counterposed to economic vested interests, sometimes capable of resisting them and at other times obliged to subordinate itself to them entirely. It is therefore advisable to exercise a certain amount of caution in our approach to those who seek to criticize the classical Marxist theories of imperialism adopting the Weberian logic. Unfortunately there is a whole constellation of con- temporary analyses that move in this direction (see below). 3.4 Modern theories of 'New imperialism' 3.4.1 Imperialism as a symptom of capitalist crises: Short notes on Harvey's approach Harvey's analysis of the 'New Imperialism' is ambitious and includes a wealth of information and insight. It is no accident that it ha s been at the centre of such wide-ranging discussion in the relevai' 1 contemporary literature. Alternatives to Classical and Centie-Peripliery Appmaclies 7 1 e writer seeks basically to arrive at an interpretation of imperial - from the 'dialectical relationship between the politics of state id empire on the one hand and the molecular movements of capital cumulation in space and time on the other' (Harvey 2003: 89, also p. 26). In this fashion, Harvey insists on regarding the economic ^movements of capital') and political ('politics of state and empire') els as autonomous and independent moments within the social totality. ence, 'the fundamental point is to see the territorial and the capitalist logics of power as distinct from each other' (ibid.: 29). I One of the basic consequences of the above is that the state and i&pital or the fractions of capital are represented as autonomous agents (ibid.: 89-91), whose actions 'intertwine in complex and sometimes intradictory ways' (ibid.: 29) because their 'motivations and interests' \ffer {ibid.: 27), This is of course the Weberian premise of the two inter- mnected logics of power. In this way Harvey defends the institutional- it problematic that portrays the state as entirely independent of (and ,SO external to) the class struggle, pursuing its own 'territorial logic of power' at the initiative of state managers (ibid.: 29-30). [ However, as we shall discover below, this thesis is, in the course of Analysis, often subject to challenge and the state treated as if it is a tool in the hands of multinational corporations and finance capital (ibid.: 188-9, 135-6). Brenner (2006: 80-6) charges Harvey with failure to fol- low his own methodological premises consistently. Such inconsistency $s in our view explicable from his having embarked' on his analysis without my clearly defined theory of the state. Brenner is right when he argues that Harvey 'never tells us why he expects the territorial logic of power and jibe capitalist logic of power to come into conflict' and that 'his illustra- tive examples do not make his case' (ibid.: 81). Harvey's basic approach to imperialism moves along the same trajectory as the previously men- tioned classical theories. Let us be more concrete. Imperialism is characteristically linked to capitalist crises (Harvey .2003: 124, 126) and there are detectible links between the new impe- rialism and the overaccu mutation crisis that developed capitalism has teen embroiled in since the early 1970s. There are evidently two pos- sible escape routes from the crisis. The first route enables capitalism to Survive through 'a series of spatio-temporal fixes that absorb the capi- talist surpluses in productive and constructive ways' (ibid.: 135). But of Course this is the hard way, necessitating intrast natural reorganization **> core capitalist countries. The second route requires the use of political *tid military means to turn international competition to the advantage ; ,^f the more powerful states, not to mention financial means 'to rid 72 Rethinking Imperialism: A Study of Capitalist Rule the system of overaccumulation by the visitation of crises of devalua- tion upon vulnerabfe territories. |...| Like war in relation to diplomacy finance capital intervention backed by state power frequently amounts to accumulation by other means. An unholy alliance between state powers and the predatory aspects of finance capital forms the cutting edge of a "vulture capitalism" that is as much about cannibalistic prac- tices and forced devaluations as it is about achieving harmonious global development' (ibid.: 134, 136). In the absence of any other solution, the 'new imperialism' is what emerges from the second route to escape from capitalism's declining profitability. On this point the writer adopts - admittedly after complex ratiocination - the traditional problematic of Hobson (ibid.: 126), hav- ing first introduced a Hegelian interpolation. In two brief paragraphs in the Philosophy of Right, the German thinker outlines what amounts to the classic underconsumptionist interpretation of imperialism. The inner contradictions of bourgeois society impel it in this way to seek solutions through external trade and colonial/imperial practices (Hirschman 1976, Harvey ibid.). What Harvey finds interesting in the above is the idea that in periods of crisis 'capitalism must perpetually have something "outside of itself" in order to stabilize itself (ibid.: 140). This is why he also returns to analysis of Luxemburg's theories with a view to refuting them. In the face of stagnant effective demand, capitalism can achieve accumulation not only when it is able to find purchasing power in 'non-capitalist territories' (as Luxemburg maintained) but also when it takes purchasing power away from them (dispossession). It therefore begins to appear plausible that some sort of 'outside' is necessary for the stabilization of capitalism. This is the source of the basic idea of 'accumulation by dispossession': Access to cheaper inputs is, therefore, just as important as access to widening markets in keeping profitable opportunities open. The implication is that non-capitalist territories should be forced open not only to trade (which could be helpful) but also to permit capital to invest in profitable ventures using cheaper labour power, raw materials, low-cost land, and the like. [...] Overaccumulation [... | is a condition where surpluses of capital [...J lie idle with no profitable outlets in sight. [...] What accumulation by dispossession does is to release a set of assets (including labour power) at very low (and in some instances zero) cost. Overaccumulated capital can sei^' hold of such assets and immediately turn them to profitable use. (ibid.: 139, 149) Alternatives to Classical and CentTe-Periptwry Appmaclies 73 I Marx's fundamental mistake, according to Harvey, is that he relegates Primitive accumulation, that is accumulation based upon predation, baud and violence, to an 'original stage' that is considered no longer ; evant (ibid.: 144). I4 But by the same token, Luxemburg too is par- ally wrong when she understands this 'outside' of capitalism as a closed system (ibid.). For Harvey, the idea that some sort of 'outside' js necessary for the stabilization of capitalism has of course some relevance. But capitalism can either make use of some pre-existing outside or it can actively create it (ibid.: 141). In the former case, the pre-existing outside is to be identified primarily with the public realm. «The neoliberal logic of privatizations makes a pre-existing outside avail- able for surplus capital: 'assets held by the state or in common were released into the market where overaccumulated capital could invest in them, upgrade them, and speculate in them' (ibid.: 158). But the same goal can be achieved when the outside is created through crises, which result in devaluation of existing capital assets and labour power: igional crises and highly localized place-based devaluations emerge a primary means by which capitalism perpetually creates its own other" in order to feed upon it' (ibid.: 151), The capitalist state, which proves an indispensable tool at the dis- sal of capital (ibid.: 154), obviously contributes with all its might to this process. 'One of the prime functions of state interventions and Ijftf international institutions is to orchestrate devaluations in ways that permit accumulation by dispossession to occur without sparking a general collapse' (ibid.: 151). Although he many times asserts the contrary, in elaborating his argument Harvey has no qualms about reducing his 'political agent' to the intentions of the economic agents, implying that the state functions (periiaps willingly) as a helpful tool in the hands of financial rentiers and multinational corporations (ibid.: 184-6, 189, 147). We do not intend to try to put forward a comprehensive critique of the weaknesses of the preceding train of thought. The basic problem is that the profitability of capital and production of surplus value are treated as Questions of income redistribution. It is for this reason that the solution to me crisis ot overaccumulation is also relegated to the status of plunder, *vhich is nothing more than income transfer for the benefit of capital. The accumulation of capital is represented as being spatially extensive "©cause it is based on a devaluation of the productive inputs that capi- is able to impose. In this sense the neoliberal movement of capital based on the plundering of income, situating Harvey rather closer to *e problematic of Ricardian socialists. The solution to the problem of 74 Rethinking Imperialism: A Study of Capitalist Rule profitability is, again, unequal exchange, permanent theft, dispossession. His argument could probably also be read as a generalization of the theories of unequal exchange if the concept can be made to apply t the movement of capital in general and not to the economic relations between the individual states. Still, the solution to capitalism's crisis cannot just come from some 'outside'. It must be intensive in the sense of presupposing a total reor- ganization of the conditions of exploitation and production of surplus value, that is to say an overall reconstitution of the movement of M-C-M' inside the capitalist 'core' countries (a prospect that Harvey (ibid.: 108-24) takes into account in a way that excludes the consid- eration of class struggle). Harvey's essential argument has to do, quite directly in the final analysis, with the problematic of classical theories on imperialism. Capitalism cannot find domestic outlets as a solution to the economic crisis and accordingly 'exports' capital, imperialism and, on occasion, wars (ibid.: 180-2). Consequently, capital's contemporary strategy is accumulation by dispossession, which of course lies at the heart of imperialist practices: The rise in importance of accumulation by dispossession as an answer, symbolized by the rise of an international politics of neolib- eralism and privatization, correlates with the visitation of periodic bouts of predatory devaluation of assets in one part of the world or another. And this seems to be the heart of what contemporary imperialist practice is about. (ibid.: 182) The main elements of the traditional theories are preserved intact. The discussion on imperialism is transformed into a discussion on capitalist crises. Imperialist policies serve the neoliberal requirements of capital export from the strongest countries. Ultimately imperialism appears as a characteristic or a power that is possessed or preserved as a privilege by the powerful developed states (often as a symptom of crisis). From this viewpoint Harvey's intervention is symptomatic of the research strategy that seeks out the causes of imperialist policy in the structural crises that appear inside the developed capitalist economies. 3.4.2 How new is 'new imperialism'? Short comments on Callinicos' argumentation Callinicos makes persistent references to a Marxist approach to import" alism. Unlike Harvey, he intentionally takes as his theoretical start ii'S T Alternatives to Classical and Centre-I'eriphery Approaches 75 point the interventions of Lenin and Bukharin (coming to conclusions jiniilar to those of Harvey). However, he does not dispute the fact of their having noteworthy limitations, demanding criticism, revision jjjd refinement (Callinicos 1994; 2005; 2007: 537). He makes it clear lltat bis own argumentation is based on a reorganization of, and not a 0iere reproduction of, classical theories of imperialism (ibid.). He clas- sifies himself together with Harvey as one of the 'theorists of the new imperialism' (in accordance with the suggestion of Kiely 200Sa: 32-4): Both Harvey and 1 have independently developed very similar con- ceptions of capitalist imperialism as constituted by the intersection of, respectively, capitalist and territorial logics of power and economic and geopolitical competition. One of the attractions of this approach is that it avoids any attempt to reduce the geopolitical strategies of states to economic interests |...|. The Marxist theory of imperialism analyses the forms in which geopolitical and economic competition have become interwoven in modern capitalism, but does not seek to collapse these analytically distinct dimensions into one another. [...] The real challenge to Harvey's and my position Is not that it is economic reductionist, but rather precisely the opposite. (Callinicos 2007: 539) The above quotation gives a concise summary of Callinicos' view- point, which (like that of Harvey) amounts to a return to the well-known Weberian problematic. On the question of 'geopolitical competition' Callinicos frankly admits that he is influenced by contemporary analy- ses of the neo-Weberian historical sociologists (Callinicos 2006). The following brief comments may be helpful in highlighting the overall logic of the writer's viewpoint. Firstly, following the same line of argumentation as Harvey, Callinicos sees capitalist imperialism as the result of a historic encounter between two different forms of competition, (i) economic competition between cap- SUs and (ii) geopolitical competition between states. Moreover, these b'vo forms of competition begin definitively to merge only towards the ^d of the nineteenth century. Callinicos is here reiterating the well- Known argument of Hobson and the classics of Marxism, regarding Present-day imperialism as a relatively recent historical phenomenon that emerges somewhere around the end of the nineteenth century (Callinicos 2005; 2007: 540-1). Callinicos' view is that up until that point political competition was me thing separate from economic competition. Following Brenner 76 Rethinking imperialism: A Study of Capitalist Rule (see below) - and up to a point Schumpeter - he falsely believes that during the phase of transition from feudalism to capitalism, that is to say the period of military expansionism and constitution of states, geo- political competition is imbued with feudal elements (Callinicos 2005), with the result that this transitional phase of capitalism is extended Into the early twentieth century. But his finding also betrays a conviction that in this transitional phase the dimension of politics is something entirely separate from the overall changes at the economic level, retain- ing conspicuous feudal features or residues. 16 We propose to embark on a more comprehensive critique of these views in Part II. For the moment suffice it to say that the initial stage of transition to capitalism already presupposes a state with manifestly capitalist characteristics (notwithstand- ing the fact that the bourgeoisie may not yet have attained full political supremacy), meaning that the specifically capitalist conjoining of eco- nomic and political 'competition' has been accomplished in the struc- tural sense long before the turn of the twentieth century (see Chapter 4, also Poulantzas 1973: 157-67, Foucault 2007). Secondly, Callinicos (2007: 54S) does in fact try to avoid reproducing the logic of economist ic reductionism: 'capitalist imperialism is best understood, 1 claim, as the intersection of economic and geopolitical competition. But, since (per hypothese) these forms of competition differ in structure and are (immediately at least) supported by the interests ot different actors, how they interrelate is historically variable.' Evidently, in order to differentiate his own position from that of the writers who would reduce geopolitical competition to economic competition, he reverts to a problematic of institutional historicism (a conception which as we saw before notably pervades Harvey's analysis also). According to it, the relations between the various levels of a social formation can be reduced to malleable interpersonal relations between independent agents belonging to different social groups. As Callinicos (with Ashman (2006)) characteristically notes, 'the interrelation of economic and geopolitical competition must be grounded in an account of the rules of reproduction of two groups of actors, capitalists and state managers These social groups are distinct both in their collective motivations and in their vested interests. Thus, it is ultimately the historical form of these interests that will shape the form of the interrelation between capital (economic) and the state (political). Thirdly, the definition of capitalist imperialism as the historical outcome of an interconnection between capital and the state means, according to Callinicos (2007: 541, emphasis added), that 'the process of inter-state competition became subsumed under that between capitals. T Alternatives to Classical ami Centre-Periphery Approaches 7 7 The sentence just quoted is already reproducing the reductionist logic that characterizes the traditional theories of Marxism. But the state Is not subordinating itself to capital as an inert instrument. It is a free agent, whose interests harmonize with those of capital. 17 In any case, i he upshot is that Callinicos' analysis in the end suffers from the same problems as Harvey's: the state becomes dependent on capital because the securing of its 'own interests' depends on the promotion of capitalist profits and capital accumulation. 18 Fourthly, the aforementioned institutional view of the collective agents enables Callinicos (1994, 2005, 2007) to proceed with the following periodization: Not only does capitalist imperialism get underway at the end of the nineteenth century but it may be divided into two separate phases depending on the relations between economic and geopolitical competition. During the first period, covering the twentieth century up to the Second World War, 'economic and geopolitical competition were mutually reinforcing' (Callinicos 2007: 546). This provides a ret- rospective vindication of classical theories of imperialism because even if they do not succeed in providing us with a comprehensive position on imperialism, they nevertheless do succeed in conveying an accurate picture of their times, placing emphasis on the link between state and capital. During the second period, by contrast, 'the second half of the twentieth century was [...] marked by a partial dissociation of economic and geopolitical competition' (ibid.). We are now in the era of the Cold War, when the United States 'was able simultaneously to integrate all the regions of advanced capitalism into a single transnational political and economic space' (ibid.). In this instance the competition between capitals did not have the same potential for transformation into mili- tary conflicts as it occurred In the preceding period (for more on this see Callinicos 1994). There is nothing surprising about the criticism to which both Callinicos and also Harvey have been subjected as a result of being identified with the traditional reductionism and economism of classical Marxist theories (Kiely 2006) and/or, effectively, with the positions of Weberian historical sociologists and theoreticians of the realist school of international rela- tions (Pozo-Martin 2006). In reality, as can be seen from the abovemen- H «ned periodization, Callinicos' methodological historicism enables him ° shift at will in either direction. What is most important, however, is J™* the prerequisite for the previous shifts has been a failure to compre- end the specifically capitalist character of the state. 1M This is a misun- rstanding that stems from the historicist way in which he examines °ciety as a whole. We shall return in detail to this in Part II. 78 Rethinking Imperialism: A Study of Capitalist Rule 3.4.3 The new imperialism as an 'economic relation' Harvey's intervention should perhaps be recorded within a broader frame of reference, which in a relevant extension of classical Marxist theories seeks out the roots of 'Western imperialism', and in particu- lar that of the United States, in phenomena of (economic) crisis mak- ing their appearance inside developed capitalist societies. However, it could be understood as an extreme variant of the abovementioned train of thought (such as that put forward by Callinicos) that 'Western capital' moves beyond the political boundaries of the West in an international (global) quest for privileged spheres of profit- ability, without this necessarily being linked with crisis processes or crisis phenomena. On the contrary, it could be a necessity imposed by the very nature of capitalism. This notion is also very much present in the relatively recent intervention of Wood (2005) to which we now propose to devote some attention (as representative of a broader literature). 20 We do not here propose to expand the discussion into all aspects of Wood's analysis. We will confine ourselves exclusively to the question of defining the new imperialism and the presuppositions that accom- pany it. According to the writer, the term 'new imperialism' denotes the form of imperialism that emerged after the Second World War in conjunction with the economic and political-military hegemony of the United States. The new imperialism is basically an 'economic relation- ship' and requires 'brutal force to implant and sustain it' (ibid.: 153). it is out of this that there emerges the differentiation between the 'new' imperialism and other older historical forms assumed at various times by imperialism (capitalist or otherwise). To better understand Wood's argument we should note that capi- tal becomes more comprehensible if seen as an autonomous eniit}' which, while always retaining a specific national origin (ownership). can expand into a geographical space which much transcends national boundaries (of the state in question). From this viewpoint capital can- not in any sense be comprehended as a social relationship of exploita- tion within the community in which it is operating, with the result that we are now embarking on radical differentiations from Marx's theoretical system. In fact Wood's analysis is entrapped in what Marx called fetishism of capital focusing on the fact that the 'social relation of capital appears to everyday experience 'as the mere fruit of property in capital' (Marx 1991: 516, 497). Individual 'capital' as 'thing' seem* to be moving away from its national basis, expanding into a poli' 1 ' cally fragmented international space, discovering fields of application- Alternatives to Classical and Centm-Periplwry Approaches 79 d producing profits which however never cease to refer the capital W*o an 'ethnic' entity (that is to say to its origins at the centre). 21 As we ■propose to argue in detail in Part 11 of the book, such a conception fails Ko capture the reality of actual capital movement. Capital that crosses ■national borders is incorporated into a different process of capitalist Accumulation, in accordance with the terms that prevail within the ■recipient country. It 'represents' on each occasion different conditions Htf class exploitation, irrespective of who possesses the 'legal right' to the surplus value produced. Manifestiy flirting with the dependence theory. Wood (2005: 154) moreover considers that global geopolitical space is divided up between 'imperial powers' and 'subordinate states'- The problem of the new imperialism can thus be formulated as follows: if the economic hegemony of 'imperial capital' is extended beyond the range of efficacy of its nation- state, the latter is obliged to resort to political imperialism of a type appro- priate to developed capitalism, so as to secure from a distance the specific legal and political order that is required in its everyday transactions. The method of positing the question is reminiscent of a logic correspond- ing to that found in classical Marxist analyses. 'Western capital' or Imperialist capital' functioning in straightforward accordance with the 'operations of the market' is able to engage in limitless exploita- tion of the 'subordinate economies' (ibid.: 20), thereby imparting to the developed capitalist centre a power of 'imperial domination far beyond the capacities of direct political rule or colonial occupation' (ibid.: 21). 'Actually existing globalization, then, means the opening of subordinate economies and their vulnerability to imperial capital, while the imperial economy remains sheltered as much as possible from the obverse effects' (ibid.: 134). It thus becomes comprehensible why the new imperialism is regarded as a 'directly economic relationship' (ibid.: 153). The exten- sion of 'imperialist capital' prescribes relationships of global economic domination, which in turn comprise the domain of a new empire. ie concretely: : Not only imperial powers but subordinate states have proved neces- sary to the rule of global capital. [...] The 'globalized' world is more than ever a world of nation states. The new imperialism we call glo- balization, precisely because it depends on a wide-ranging economic hegemony that reaches far beyond any state's territorial boundaries or political domination, is a form of imperialism more depend- ent than any other on a system of multiple states [..,] Imperial 80 Rethinking Imperialism: A Study of Capitalist Rule hegemony in the world of global capitalism, then, means controlling rival economies and states without going to war with them. (ibid.: 154, 157) In contrast to current theories of globalization, Wood's version highlights an imperialism in which nation-states retain their significance as interme- diate links in the moment of 'global capital' (ibid.: 1 54).- Present-day wars are of a different character to those of the past. They do not correspond to a regime of generalized conflict between the dominant imperialist powers, but have to deal with the 'constant threat of force' (ibid.: 164) based on die military power of the new empire of the United States: 'this endless possibility of war that imperial capital needs to sustain its hegemony over the global system of multiple states' (ibid.: 1 65). If we have chosen to refer to Wood's intervention, it is because we regard it as representative of a general framework of thought whose influence, embodied in a number of different variants, is still very much in currency in the present-day discussion. As may be readily understood, these views reflect a logic which, to a greater or lesser extent, character- ized both classical Marxist theories and post-war neo-Marxist approaches to dependence. The central idea is reducible to a scheme for income redis- tribution. Whether through trade flows or through financial flows (within a neoliberal framework), the capitalist 'centre' always appears to be extracting surplus value from the 'periphery' and it is precisely this form of economic 'exploitation' that comprises the core of today's new imperi- alism. 2:i The latter is politically supported by the action of the hegemonic imperialist states (though not to the same extent), it is a conception that comes very close to the conclusions of the world-system(s) theory. If we accept the significance of the nation-state in contemporary 'globalized' capitalism (a notion that represents a blatant breach with analyses that speak of a globalized bourgeoisie freed from attachments to specific states so as to be able to create the prerequisites for a global authority (for more on this discussion see Chapter 10)) the above line of argument may lead to either of two different intellectual stances In relation to the links between the new and the old imperialism. AH ihi s takes us a long way back in time, to a dilemma with which the thought of Kautsky was required to grapple. 3.4.4 Once more on Kautsky's dilemma: Different conceptions of 'new imperialism' The dilemma of 'inter-imperialist conflict vs. global imperialist coali' tion', that is the dilemma on the subject of ultra-imperialism that Alten waves to Classical and Centie-Peripiiery Approacltes 8 1 lagued Kautsky from very early on, bore within itself the logic of /ffonnism. It was this that attracted Lenin's harsh criticism. Kautsky's line of thought came up against the following dilemma. Although he himself never ceased to believe that developed capitalism needed to be a ble to expand abroad in order to survive (seeking raw materials and outlets for capital), at the same time, he thought that intra-imperialist conflicts and military confrontations were contrary to the long-term interests of the bourgeoisie. This was because the latter was faced simultaneously with opposition both from the metropolitan working class and the national liberation movements in the colonies. This con- tradiction could be resolved only through a peaceful ultra-imperialism (a notion which effectively detached the abolition of imperialism from the tasks of the revolution, see Kautsky 1914; Lenin, CW, vol, 22). What was necessary was the creation of a 'holy alliance' between the great capitalist powers, a collaborative imperialism (albeit not of equals) by means of which the differences in imperialist power could be incorporated internally without the outbreak of violent antagonisms. In the present-day discussion the same question, along with its vari- ations, comes back again and again. There are accordingly a number of analyses which, while agreeing on the logic of the new imperialism, dif- fer on the question of how the form of inter-imperialist contradictions Is to be Interpreted. Some of these approximate Lenin in his analysis of the imperialist chain, placing particular emphasis on the contradictions between the great imperialist powers, while others are more receptive to the problematic of Kautsky. 2-1 The line of thought is essentially familiar. Competition between individual national capitals in the international sphere draws in and transforms die politics of the corresponding national states, which notwithstanding the assessments of the supporters of glo- balization have not lost their salience. The imperialism of the capitalist centres is either collaborative in character or otherwise this 'collabora- tion' could perhaps be regarded as a brief respite between the inevitable sharpened inter-imperialist contradictions. The following comments will necessarily be brief (with all the dangers inevitably entailed in presenting a summary account of a massive volume of writing). Many theoreticians of the new imperialism attach particular impor- tance to the fad that inter-imperialist rivalries persist, or at least that there is the permanent potential of their coming back. Imperialism 15 a game of economic hegemony also played between the states of developed capitalism, and all present-day political conflicts and wars Ina y be situated to a greater or lesser extent within such a framework. 25 According to Rees (2006: 37) it is in the 'critical meeting point between 82 Rethinking Imperialism: A Study of Capita lis I Rule overwhelming military strength and relative economic decline' that 'we can best see the motivation of the US increasingly to rely on its military capacity to discipline both its allies and its competitors on the world stage' (for more see Kiely 2006; 210-11). On the other hand, several commentators share Kautsky's problem- atic, being more inclined to see the contradictions between the impe- rialist powers as subordinated to a logic of collaboration at least during the period that followed the end of the Second World War. 2 " According to these writers the new element characterizing imperialism today, by contrast with classical imperialism, is that there is no unequivocal rela- tionship between 'imperialist capital' and the countries in which it is invested. With the collapse of colonialism there is a new type of asso- ciation between capitalism and imperialism, the key element of which is: 'that the densest imperial networks and institutional linkages, which had earlier run north-south between imperial states and their formal or informal colonies, now came to run between the US and the other major capitalist states' (Panitch and Gindin 2003). This 'does not mean that capital is no longer tied to particular nation states, but it does mean that the world cannot be divided into exclusive blocs. [...J As things stand we have an international order in which competition exists alongside high levels of cooperation between the major states, led by the US [...], but other states are happy to cooperate in this order provided some gains are made for all' (Kiely 2006: 213, 21 1-12). It is also worth noting that in the most recent analyses one frequent ly sees great emphasis on the role of the United States as the driving force behind global development. Without wishing to ignore the importance of the American economy, we should emphasize that this is a concep- tion that underestimates the role of class struggle in the mode of organi- zation of capitalist development inside nation-states. It is in any case for this reason that the same analyses share the view of Kautsky, which they have arrived at from a different route. Kautsky considered that it was the resistance of the workers that had forced the imperialist powers to avoid sharpening the conflicts between themselves. By contrast, in the preceding analyses co-operation between the imperialist states of the capitalist centre emerges from the growth of an increasingly integrated world market. 27 The basic element linking together all the above approaches of the new imperialism is in the final analysis the non-acceptance of the con- cept, central to Marxist thought, of social capital or collective capitalist- We will have the opportunity to concern ourselves with the details of this question in Parts II and III of this book. The individual capitals that Alternatives to Classical and Ceritre-Pehpiwry Approaches 83 are introduced into a social formation are seen as foreign 'things' that either are unable to be integrated into the elements of social capital and so persist in functioning antagonistically vis-a-vis 'domestic' capital in the first case, or ate: included in social capital so as to decompose it. In one case 'imperialist capital' exploits the 'subordinate economies' (Wood 2005: 20), while in the other 'domestic capital' tends 'to be "dis-articulated" as a coherent and independent national bourgeoisie' (Panitch and Gindin 2003). 3.5 Geopolitical competition as a remnant from the pre-capitalist past: Recent echoes of Schumpeter's thesis As ascertained previously, Callinicos' analysis (and that of Wood as well) of the origins of present-day imperialism is undoubtedly influ- enced by the arguments we meet with in the work of Brenner (1976, 1982, 2001). In the analysis of Brenner (1982: 16) each historical period is charac- terized by its own property relations which, once established, impose nar- row boundaries on every form of economic development. This means that property relations limit and shape the behaviour of economic actors, who are on each occasion in a position to pursue rigorously specific strategies for reproduction of the social and economic posi- tions they occupy. One of the basic corollaries of such a thesis is that it imposes a mild historicist problematic 2 * on the investigation of capital- ism, particularly on the investigation of the latter's early phase during the period of its transition from feudalism. Consequently, one of the most conspicuous peculiarities in the analysis of Brenner (1982, 1976) has to do with the reappraisal of absolutism. According to the latter, the social property relations accompanying the period of absolutism are not yet capitalistic but neither are they any longer specifically feudal. Exactly the same is true of the character of the absolutist state, in the sense that it is caught up in the maelstrom of geopolitical accumulation (Brenner 1982: 36-41) that generally characterizes pre-capitalist periods (for more in this connection see Lacher 2005, Teschke 2003, Pip 2006, Wood 2005). In pre-capitalist periods - always according to the logic of Brenner (ibid.) - for a number of reasons there was no incentive for increasing Production through the introduction of technology. As a result, the basic means at the disposal of the ruling class for improving its own m aterial situation (apart from through collecting land rent from the 84 Rethinking Imperialism: A Study of Capitalist Half peasants) was through territorial expansion. This involved a number of prerequisites, such as, for example, expenditure on military forces and armaments, but also more effective political organization of the feudal domains with a view to concentrating resources to finance military operations. Pre-capitalist social organization thus necessarily included a dynamic of territorial expansion and constitution of states, within which the dominant process is that of geopolitical accumula- tion through the conquest of new territory. This process is essentially accumulation through redistribution of wealth, 2 '' and to some extent resembles the Schumpeterian logic. The above train of thought can lead us to some general conclusions, which come into conflict with our theoretical orientation as we shall have the opportunity to demonstrate in Part II. It is surely no surprise that not only Callinicos who, as we have already ascertained, draws on the problematic of Brenner but also Lacher (2005) and Teschke (2003, 2007), whose work is an immediate extension of the logic of the latter, should more or less share the neo-Weberian notion that geopolitical competition between states preceded capitalism and is not at all linked to the particular logic of social organization that corresponds to it. It is a view that leads inevitably to the conclusion that 'capitalism [...] came to exist, politically, in the form of a system of territorial states - a historical legacy of the post-feudal period that continues to structure capitalism until the present day (though perhaps not beyond)' (Lacher 2005: 34; see also Teschke and Lacher 2007). In the same train of thought Brenner (2006: 84) concludes: Abstractly speaking, a single state governing global capital is perfectly conceivable and probably most appropriate from the standpoint ol capital. [...] That capitalism is governed by multiple states is tlie result of the historical fact that it emerged against the background of a system of multiple feudal states, and, in the course of its develop- ment, transformed the component states of that system into capital- ist states but failed to alter the multi-state character of the resulting international system. In the opinion of the writers, absolutism did not promote a capital- ist bourgeoisie, so that the absolutist state failed to become a modern state. It was not even a precursor of, or a transitional stage towards, a modern state (Teschke 2003: 189-93). Mercantilism was a rationalize" tion strategy of absolutist rulers who were failing to promote capital^ 1 industry. Mercantilism's social rationale was based on the persistence 0* A Itematives to Classical and Centm-Peripliery Approaches 8 5 kon-capitalist social property relations, which necessitated the internal fend external accumulation of surplus by political means, either through ■direct political coercion of direct producers or through a politically Ipaintained unequal exchange, that is through political accumulation ■ibid.: 210). Hence, according to Lacher: The argument outlined above does not imply that the international relations of capitalist modernity are somehow marked by a persistent logic of absolutist geopolitics. To be sure, during the 19th century, and even into the 20lh, there were absolutist remnants that continued to exert influence over the politics, economy and culture of capitalist i societies (...]. Still, if absolutism bequeathed capitalism a territorial framework, if the products of the logic of political accumulation that , had operated in the absolutist period continued to structure capital- ist modernity by imparting to it an inter-state dimension, that does not mean that the absolutist international system persisted. (Lacher 2005: 34) pr th A Schumpeterian logic echoes in the above formulations. We do not |ttopose to embark on a detailed commentary of these views because would divert us from our purpose. Let us focus on the basic position at until recently the dynamic of imperialist competition has not fcntailed anything specifically capitalistic: to a significant extent it is an inheritance from absolutism. 30 From this viewpoint the traditional ■period ization of imperialism (which we have already noted) continues Bo apply, while the distance from the neo-Weberian analysis is not mltimately so great: for a significant part of its history (until recently), fapitalism has coexisted with a geopolitical competition that is foreign to its specific historical character. 3.6 Social imperialism theories: Back to the 'prestige' fespect of political power